BQ Big Decisions: Why Understanding Risk Is Crucial For Every Investor
Higher the risk, higher the return. But also, higher the risk, higher the potential for loss.
The BQ Big Decisions podcast gets you the insight you need to make big money decisions with confidence.
History loves courage. In the oldest tales known to mankind, those that involve valour and bravery stand out as favourites. You too may have been told often that fortune favours the brave and who dares wins.
Even in the stock market, this is perhaps the first rule new entrants learn. And after that, “higher the risk, higher the return” becomes a mantra. But this should ideally tell you that when the risk is high, the potential for loss is also high.
Most people tend to focus on potential returns and only vaguely take into account risk, according to Kiran Telang, a SEBI-registered investment advisor. This leads to unrealistic expectations of gains and investments that are, many times, inappropriate, Telang said.
On this BQ Big Decisions podcast, BloombergQuint spoke to Telang about the behavioural tendencies of most people when it comes to investments, and how knowing one’s risk profile can help avoid mistakes.
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