One my favorite definitions of investments is this – “The commitment of funds made in expectation of some positive rate of return. If the investment is properly undertaken, the return will be commensurate with the risk the investor assumes.”

Whenever people invest, their primary concern is almost always about return. While it is obvious that we should be concerned with returns as I have never met anyone who invested and expected no return. However, returns are not the only thing you need to be concerned with. Even prior to concerning yourself with returns, what you may want to look at first is the risk. After all, returns are, in a great way, a function of the risks that you take. Many people would want high returns but might overlook the inherent risks those returns will bring. One of Warren Buffet’s famous quotes says “Never test the depth of the river with both feet”, such a wise reminder.

Before committing yourself to any investment, it is important that you know what the risks are. To this date, the principle of risk and return trade off still holds true and time will not change that despite the ostentatious claims of some investment experts – ‘high risks, high returns; low risks, low returns.’

When you begin to chase returns, there is a high possibility to you may begin to be desensitized as to the risks that you take. The lure of big returns have fooled many unwise investors into losing more than their shirts, so to speak.

Go ahead and invest, it really is a wise thing to do… but make sure that as you invest, you fully understand that the risks that you are entering into, an those risks are acceptable to you. Further, ensure that your investment are always consistent with your investment objectives.

Craft a prudent investment strategy and do not chase returns, you made find yourself falling off a cliff.

Learn the proper way to invest at the country’s most empowering investment conference — #iCon2017 this May 27, 2017 at SMX Aura, Taguig City. This conference features me and my friends: Marvin Germo, Rex Mendoza, Rosemarie Rafael, David Leechiu, Carlo Ople and many more. Tickets are going very fast so go and book your seats at www.bit.ly/ICON_2017