6.6 Lessons learnt

What you have learnt

• A famous saying is that risk and return go hand in hand. The more risk you take the more return you wish to obtain.
• Risk can be measured in various ways, on a portfolio level and an instrument level. It all depends on you as an investor to decide how much risk you want to take.
• An individual stock can be risky when that one stock quotes for 90% of your portfolio but if that one stock is only 3% of your portfolio the risk is much lower as the concentration of that stock is lower.
• To mitigate risk on individual stocks you can also opt for an ETF which is a basket of individual stocks tradeable as an individual stock and allowing you to diversify your investments with just one purchase as we have shown you before.
• Click here to consult the dictionary.