Embarking on the investment journey in Crypto, Stocks, and Forex can be thrilling yet fraught with uncertainties. In our latest video, "Risk vs Reward: Maximum Gains + Minimal Risks in Crypto, Stocks & Forex," we unravel the complex world of investments and guide you toward a path that balances the desire for substantial returns with a controlled risk appetite.
00:00What's up guys, welcome back to the channel. In today's video we will be talking about risks versus rewards when it comes to striking the perfect balance in your investment portfolio.
00:12So we do know that in the realm of investments there's a correlation between risk and reward and this is a fundamental concept.
00:19So generally the higher the potential return the greater the risk and vice versa. So finding the right balance between your risk and rewards is the cornerstone of you being able to actually invest in a very successful way.
00:34So in this video we will be diving deep into how you guys can actually strike this balance and make sure that you're succeeding whether you are investing or trading in stocks or cryptocurrencies or just investing in real estate or any other asset.
00:50This actually applies all across the board. So if you like this type of content make sure you hit that like button.
00:56Also turn on those post notifications and also make sure you check out the links in the description and always go to our main site decentralized.news.
01:06So let's not waste any time. How do you actually get around understanding the risks and rewards when it comes to investment?
01:14So let's just define what risks are. Obviously you know what this is in general but it is generally the possibility that the actual return on your investment can actually differ from the expected return.
01:26So the high risk investments are associated typically with greater volatility and potential for loss.
01:34This is why a lot of people always say that you know they're scared to get involved in things like cryptocurrencies for example.
01:41But when it comes to getting rewards on the other hand you know the potential return on your investment means that you know the higher rewards often also come with that increased risk.
01:52So for instance stocks have a higher return potential compared to bonds but they can also come with greater volatility.
02:00And like I said if you're going into the world of crypto you will be definitely somebody who should be able to stomach a lot of volatility.
02:10So how do you strike a balance? There's so many different things that you can do.
02:14One thing is to make sure you're staying diversified when it comes to your asset allocation.
02:20So the key to balancing risk and reward actually lies with the strategies like diversifying your asset allocation which involves spreading your investments across different asset classes or industries or geographic areas.
02:35So diversifying actually helps you to reduce risk of poor performance in one investment that can significantly impact your overall portfolio.
02:46So let's say you're all in on crypto and then there's a crypto bear market and all your money is tied into cryptocurrencies.
02:53That could be something that could be something that can also go wrong for you over the long term.
02:58So just being diversified whether you're doing a little bit of stock market trading, maybe some people like to do forex trading, you're investing in real estate and also maybe commodities and things like that that can typically give you a little bit of a balance.
03:14But again this is not something that's easy for the average person to do.
03:17I typically like to stick to things that I understand.
03:22So like I said you know asset allocation in itself is just a process of distributing or deciding how you actually distribute your investments among those different asset classes whether it's stocks or bonds or real estate or cryptos.
03:35So a young investor for example with a high risk tolerance should or can actually opt for things or portfolio that's heavily weighted in stocks and cryptos for example while somebody who's probably a little bit older or nearing retirement might favor things like bonds or real estate.
03:54So we can just look at all the different asset classes and examine how balancing risks and rewards across this investment classes actually works out for you.
04:06So if it's stocks, a well-balanced portfolio should include a mix of let's say large cap, mid cap and small cap stocks diversified across different industries as well.
04:18And for instance you can have blue chip stocks like Apple or Microsoft that offer what you know most analysts would say a stable and consistent dividend with lower growth potential while you can also see when it comes to stocks the smaller cap stocks often are the ones that are high growth potential but also come with a greater risk.
04:41Same applies in a way with cryptocurrencies like Bitcoin and Ethereum they offer high reward potential but also come with significant risks due to price volatility so diversification within the crypto space can be sort of achieved by investing in different types of cryptocurrencies for instance an established mix of just you know blue chip assets like Bitcoin and then having a few altcoins as well.
05:09And also just maybe focusing on maybe one token or two tokens that are actually sort of the top performers in the different sectors within the ecosystem of crypto when it comes to real estate again real estate can actually provide a steady income and potential appreciation but it also comes with risks such as property damage or market downturns diversification and real estate can also involve investing in different types of properties so you could be somebody who's interested in residential
05:39or you can dabble in a little bit or you can dabble in a little bit or you can dabble in a little bit of commercial or industrial real estate and also just play around in different regions.
05:46So when we look at like the high level insights in terms of smart risk management it means that you know if you're striking the right balance between your risk and reward this means you will have a clear understanding of your risk tolerance first of all and also your investment goals personally.
06:03So there's some things that you can follow to just kind of have a little bit of guidance you can now for example assess your own risk tolerance meaning that you understanding the ability to actually withstand losses factors that you know you should consider some could be your own personal financial situation your actual investment goals also your emotional ability to handle these market downturns.
06:28You can also align your investments with your goals so different investments require different levels of risk for long term goals for example retirement you might be able to afford to take on a more let's say a higher risk you know potential for returns and for short term goals it's generally better to take on less risk in the short term.
06:53So also another point that you guys can always keep in mind is to just regularly review and rebalance your portfolios okay so market dynamics can shift in the balance in your portfolio needs to also adjust with time and regularly obviously doing these reviews and rebalancing can help you maintain that desired level of risk and reward.
07:15And one other thing is to just not let fear or greed drive your decision so emotion driven decisions can typically lead to buying high out of greed and selling low out of fear and you know you need to stay disciplined and stick to your investment plan and not let market fluctuations actually throw you off course.
07:38So this balance is not something that's easy it's an art and a science and it requires a clear understanding of your risk and reward tolerance your you know capacity to have that strategic diversification and asset allocation and also just having discipline in your actual behaviors when it comes to investment.
07:58So with these strategies you can actually be able to build a balanced portfolio that actually also aligns with your risk tolerance and also helps to achieve the investment goals that you've set for yourself if you've made those clear from the very beginning.
08:11So remember every situation is unique and what matters most is you finding the right balance for you.
08:18So there is no sort of kind of blueprint that applies to everybody this is why you need to just make sure you are doing the right thing for yourself always making sure you're seeking the right knowledge that's why I always recommend that you guys go to decentralized.news we've got the best cryptocurrency exchange reviews DeFi platforms if you want to learn about the NFT space how to invest how to actually trade and you know some of the things that you need to consider when you're doing these things all of that
08:48information is there clearly outlined for you so you guys can definitely navigate these markets with ease also they're free resources and tools that can help you guide you know kind of help you navigate the space like I said other than that don't forget to check out my book DeFi Millionaire if you're someone who's interested in decentralized finance which I always keep telling you on this channel guys this is the new frontier of capital markets there is no denying that DeFi is going to take over if you want to
09:18learn more about that make sure you download my free book the link is in the description you can go to DeFi-Millionaire.com if you're also interested in just knowing about tokenization of real world assets like real estate and equities I wrote an extensive book it's a bestseller tokenized trillions the link is in the description but if you want to know how distributed ledgers are also helping people across different industries whether that's healthcare insurance supply chain retail anything and everything
09:47that you can think of blockchain applied is the book that you need to check out the link is also in the description join our telegram our discord server so we can remain a community if you've got any questions and things like that I'll be happy to answer your questions leave a comment on this video if you have anything else that you want to sort of engage in and I will see you guys in the next video like share subscribe
