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Wed, February 5, 2025

Rethinking The Equation Of Risk And Return


Published on 2025-02-05 11:22:16 - Forbes
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  • This tells me that the risk-return equation is much broader than the markets want to realize. Countless examples show that the risk is as wide as the repercussions are vast. Whether conscious or not, impact is inextricable from the risk-return equation. In many cases, that functions for the better.

The article from Forbes Finance Council, published on February 5, 2025, titled "Rethinking The Equation Of Risk And Return," discusses the traditional financial theory that higher risk should yield higher returns. It challenges this notion by exploring how modern financial landscapes, influenced by technology, global economic shifts, and evolving investor behaviors, might necessitate a reevaluation of this fundamental principle. The piece delves into alternative investment strategies, the impact of ESG (Environmental, Social, and Governance) factors, and how these elements could alter the risk-return paradigm. It suggests that investors might need to consider a broader spectrum of risks, including those not traditionally accounted for, like geopolitical risks or the risk of obsolescence due to rapid technological advancements. The article concludes by advocating for a more nuanced approach to investment where risk is not just about potential financial loss but also about missed opportunities and the broader implications of investment choices.

Read the Full Forbes Article at:
[ https://www.forbes.com/councils/forbesfinancecouncil/2025/02/05/rethinking-the-equation-of-risk-and-return/ ]
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