“Now YOU can learn about retirement planning in plain English. Planning for retirement can be confusing. I cut through all the industry jargon so YOU can learn how to achieve your retirement goals.”
Have you ever heard your buddy brag about how much money he made on “X” stock? It usually goes something like:
“I bought Intel when it was trading for mere dollars. Then I sold it at the peak and had a 500% return on my money!”
Here are some things your buddy probably didn’t tell you:
- That he only used about $500 of his $600,000 portfolio to buy shares. So his overall portfolio return attributable to this investment is quite small.
- That time he bought Enron stock and lost all of his investment.
- The amount of risk he had to take to generate the return on his Intel investment
And point number 3 is the one we need to focus on today. In order to generate return on investment you have to take risk. And the expected return should be in line with the amount of risk.Continue Reading