High Risk High Return?

Being An Investor
High Risk High Return?



Once a while you would hear the statement, high risk high return, low risk low return. I wonder what and how the Risk is being involved, if everyone is very sure about what is risk itself.

By searching and finding the definition of the risk, it sounds very boring and very plain explanation that someone or something that would cause another person or thing to be stated as losses, such as loss of life, loss of money, loss of investment and etc...


Let see some examples below that different ages of human being is driving a car,

a) A 5-year old girl that would like to drive.
    Basically a child doesn't know how what is his/her risk. Just hearing people say it cannot be done.
    However, the child just would like to drive as many other adults people do.
    Sound crazy right? It is just as crazy as people like to be a billionaire or millionaire in 5 to 10 years time,
    or people likes to retire within the next 10 years time as Return is calculated without the risk.
    At this stage, this is where everyone is mentioning "high return", and don't know what is the "risk" itself.
    Therefore, "high risk, high return" doesn't exist unless with luck and that carries the same 
     meaning of "high risk, no return or low return". The High Return is over stated, as how come 
     we know the risk is high, and still going for the high risk without first lowering it.


b) A 15 youngster that would like to drive
    Basically a youngster know how to drive, but with cautions and that is lowering the risk.
    At this stage, this is where everyone should know "lowering the risk, and higher the return"
    Therefore, "low risk, low return". 



c) A 25 years old adult would like to drive.
    An adult is basically with the lowest risk as practise makes perfect.
    At this stage, "the risk is minimized, and with consistent return"
    Therefore, "low risk, high return", this is where "high risk, high return" sound ridiculous.


d) A 75 years old lady would like to drive.
    For this group of people, the risk seems to get higher.
    At this stage, this group of people knowing their ability to touch the risk concept.
    Therefore, "low risk, low return"and definitely "high risk, no return" at this stage due to
    memory losses itself.


Therefore, in whatever we do, HIGH RISK means we are unfamiliar with the risk or we are not skillful enough to handle the risk, while HIGH RETURN only exist when either following two (2) conditions exist which 

a) Lowering the risk / skillful
b) Luck.

In terms of investing, the thing "affordable to lose" and "comfortable to lose" is a norm to those skillful professional that RETURNS is able to achieve in many ways to the destination, such as pump your gas full tank, locate the gas station, get a map, or etc... if you would drive far beyond the normal distance.


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