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24/02/17
13:46
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Originally posted by cmonaussie
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Actually that simple behavior is the basis of how investing is done - the measurement of Return versus Risk.
Rational Investors : by definition are risk averse in that if offered a choice between 2 investments that have the same expected return they will always choose the investment with less risk.
Irrational Investors : by definition are risk-seekers and will choose the investment with the greatest risk even if the expected return is equal to OR LOWER than another investment with less risk
That well known, well documented behavior sums up the posts in this forum.
Irrational and exuberant posts at their finest.
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The only problem is that risk and return are not know variables. They may be able to be estimated, but if estimated differently 2 rational investors may come up with different investment outcomes.
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