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at http://citywire.co.uk/money/article/a599570 Risk and return:
how to strike the balance in your portfolio Mike Deverell of
Equilibrium Asset Management explains how finding the right
level of diversification can reduce the riskiness of your
portfolio. Investing can be a risky business. Risk and return
are highly correlated; the greater the return you want to make,
the more risk you need to take to have a chance of getting it.
It is therefore vital that you understand what risks are
inherent in any investment you make. Only once you understand
the risks can you decide if the potential return is worth it.
There is no point taking more risk than is required to meet a
given return. Risk and return: the theory Say there are two
stocks, company A and company B. Both are expected to return
around 10% growth to investors. However, company A has a much
more volatile share price than company B and a greater risk of
loss. Given the choice, most investors