But generally speaking, the shorter the time horizon the safer the investment type you should choose.
Or, just limit the amount of times you look at your account balances.
But Im usually willing to steer someone towards a type of investment.
In a previous post, I had compiled risk and returns data from Value Research Online and presented the standard deviation and 3-year returns.Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.Remember, when you are looking at expected returns you want to look at long time spans.Bonds are safe but stocks are sexy.Im not saying its likely, or that you should expect.But its certainly a possibility.Thats what we are discussing today.
The curve ball is people looking to retire early.
The average alpha is about.
Now after being reasonably comfortable with commonly used risk-return metrics like alpha, beta, Sharpe ratio, Sortino ratio etc.
Finally, concentration risk is the risk of holding too much of a single asset, which can end up hurting you an outsized amount if something goes wrong with that asset.
Bonds and stocks require you to sell them if you want to liquidate your assets and convert them into cash.
For equity mutual funds it cambridge arts theatre discount coupon could be anywhere between 3-5 years.
Bonds are more risky than cash, but less risky than stocks.There is a bunching of funds around a standard deviation of 18 (corresponding to most diversified equity funds) but there are a good number of points on either side of this bunch.Looking at short time spans, say 10 years or less, is unlikely to present useful data as it wont account for events such as multiple recessions or growth caused by disruptive technologies.So most of the funds that have beat the benchmark are either as volatile as the benchmark (over a 3y period) or just a little less volatile.That is the type of trade worth taking in my humble opinion.If we choose a diversified equity fund and hold on it for 3Y, there is a good chance of beating the market (so stay calm!).Standard deviation for all equity mutual funds (balanced, diversified, sector) looks.Keeping bonds in your investment portfolio allows you to diversify, as bonds often but not always move differently than stocks.