RISK AWARE INVESTMENT GUIDE FOR EVERYONE

      It is all about Min(Risk)/Max(Return) Higher risk is associated with greater probability of higher return and lower risk with a greater probability of smaller return , as illustrated in Figure 6. Generally, the  R isk /R eturn trade-off  is calculated with the the aforementioned key drivers of returns in combination with Risk FMR   such as STDEV, Alpha/Beta, the Treynor/Sharpe ratio,   VaR/CVaR, R-squared, DCR,   DER, ICR, and DCL. Let’s say we have to select either TSLA or AAPL based upon current EPS and STDEV values (Q4 2021): Table 14 : Example EPS and STDEV for TSLA and AAPL. Stock EPS $ Q3 2021 STDEV Q4 2021 TSLA 1.86 3.56 AAPL 1.3 1.54   Even though EPS(TSLA)>EPS(AAPL), your investment in TSLA would be considered   much more risky than that in AAPL because STDEV(TSLA)/STDEV(AAPL)~2.3.   For instance, in the...

  In economic terms, a high return means the investment’s gains compare favourably to its cost. Here are a few constructive suggestions that will give an insight about improving your returns : 1. Consider the key drivers of returns (MC, ROI, ROE, ROA, EBITDA, EBITDA Margin , Gross Profit , Gross Profit Margin , Net Profit , Net Profit Margin, Operating Margin , TSR, EPS, PER, PEG, DGR, DY, PBR, DCF, PFVR, etc. ) will help you to pin point your KPI’s that will give an insight about improving your financial health; 2. By buying investments at different times, you spread your risk - t his makes you less sensitive to price fluctuations in the longer term ; for example, with dollar cost averaging (DCA), you invest the same amount each month, regardless of how the markets perform ; t his means you buy more shares when prices are lower and fewer when prices are higher ; 3. Get serious about investing in different areas that would each react differently to the bull market (smart ...