Risks and rewards come with many decisions; dating, trying a new restaurant, and investing in the stock market. Regards to investing, risk tolerance, retirement age, and goals need to be considered when creating a portfolio. And a balanced portfolio is key to weathering the inevitable market downturns.

Those who love risk and have time to make up losses before reaching retirement age may choose to diversify their portfolio with more high-risk investments like crypto, REITs, and IPOs. Higher-risk and potentially higher reward. 

When retirement age is near, playing it safe is wise but safer investments mean smaller rewards. High-yield savings accounts, money market funds, and corporate bonds are types of low-risk investments.

Can risk be calculated? Sure. Investopedia wrote about risk vs reward calculations in an article designed to help individual traders. But, keep in mind, individual traders are already risk takers. And there’s a difference between investing and trading- a big one.

Investors think in long-term goals while traders deploy short-term strategies. They’re similar in the sense that both open accounts and then buy and sell investments. 

If you’re currently managing your own portfolio, there’s an article posted online by Fidelity that explains more in-depth the difference between trading and investing and the risks vs rewards.

For investors seeking professional help, our Alloy Investment Management team are skilled at helping clients achieve their financial goals. We work with individuals who are new to investing, as well as seasoned investors who want to revise their portfolios.