Does More Risk Always Mean More Return? | Erik Averill, Justin Dyer | AWM Insights #77

Following our deep dive into risk on last week’s episode, we received a listener question asking if risk and return are always perfectly related.

Absolutely not.

Simply taking on more risk doesn’t lead to more success. There are different types of risks that are important to understand before introducing added risk into your portfolio.

Erik and Justin continue the conversation this week to explain the differences in risk and the importance of making sure you’re compensated for the type of risk that you take on.

EPISODE HIGHLIGHTS

• (1:30) The news you should know: Federal Reserve meeting, Rivian is going public, and social media stars who move markets.
• (6:24) While risk and return are related, not all risks are well compensated
• (7:50) You can never know 100% of the risk
• (8:56) The two important questions to ask
• (10:44) Taking calculated risk
• (12:45) Participating in owning companies over the long-term to capture the market premium
• (14:23) Why smaller companies generally outperform versus large companies
• (16:49) The evidence of well compensated risk