Rate of return vs risk
Economic golden rule says that there is always possible selection between: higher potential rate of return which is charged by higher risk and lower potential rate of return with lower risk. This relationship can be in simplicity viewed on the graph:
As you can see on this graph, the level of the rate of return grows with the growth of the risk. On the other side it goes down while the risk is lower. Depending on your inclination to the risk you will choose your point on the line. If you are risky person, you will be rewarded in long term by potentially higher rate of return, but in short term your investment may be exposed to higher variations, both up and down.
The second graph illustrates the relationship between income from your investment and time. The green line shows the more risky strategy, while the red one - the safer one. As you analyze the picture, you can see that more risky portfolio brings over time greater cumulated income, but also the income variations are greater either up or down, than in case of more safe strategy. Each investor will choose different portfolio with different potential rate of return and risk. All the decisions will be made individually, depending on a personal risk tendency.
Coins theory
Investing in Coins - general rules
Countries of emission
Extras on the coins
Risk diversification
Rate of return vs risk
Emissions of coins
Fairy tales series - Belarus
Belarusian Festivals and Rites
Van Gogh - Niue Island
Australian treasures series
Famous battles - Tuvalu
Black beauties - palladium coins
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