Question

Tony Moses Josh, one should always be skeptical if someone reaches out to you to tell you what to do with your money. Then there is the idea that there is an investment with high returns and no risk, which does not really exist. There is usually a direct relationship to returns and risk, as one goes up so does the other, which is fine and makes sense, you have to "bet big to win big." What do you think? give your point of view

Answer 1

Nothing ever comes for free is an apt quote in the mentioned case. If an investor is assured of very high returns with no or almost no risk, it is probably a facade to transfer the money from investors pocket to another pocket. In reality, a rise in returns from an investment does result in rise in risk. For example: If you are investing in a early stage startup, you find your investment to be at a much more risk than when you invest the same capital in a well-established multinational corporation. However, in the second case, the returns generated would be much lower than the returns generated from a startup which turns out to be successful. Similarly, investing in bond markets, give you a secure yet low returns while investing in stocks or let's say cryptocurrencies will provide you with manifold of returns with a high risk.