INVTGEN058 Balancing Risk and Reward in Your Portfolio (549 words)

Investment risk is tightly linked to return. Not taking on sufficient investment risk can expose investors to other risks. This article looks at achieving the right balance. It includes a case study to explain.

If you own an investment property you will be aware that the return from the investment comes from two sources: income in the form of rent paid by the tenant and growth in the form of an increase in the value of the property while you own it. Likewise from a share investment, an investor can receive dividends (income) and capital gain (growth).