Risk vs Return

Every investment offers a tradeoff between risk and return. Treasury bills are nearly risk-free but return very little. Small-cap stocks may return much more — or wipe out half your capital in a year.

Risk isn't just volatility. It's the chance of permanent loss, the time you need the money, and how you'd behave during a 40% drawdown.

A good portfolio matches risk to your goals and emotions, not to what your friends are buying.