Growth vs. Risk

 

When we are deciding on what baskets we want in our retirement account, it may be helpful to think in terms of a growth basket and a safety basket.  The growth basket will usually contain mostly equities since equities have the highest historical return on average.  They also have the most volatility so the day-to-day fluctuations can be nauseating.  This is a rather elementary way of thinking about it, but often simple is good enough.  For me, spending a lot of time and effort understanding investing, returns, risk, and portfolio allocation strategies has been worth it, and I am just beginning that lifelong journey.


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Last Updated: 6/25/2018

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