Dutch to English translations [Non-PRO] Bus/Financial - Investment / Securities / Part of Guidance document on Investing for NGOs | | Dutch term or phrase: risico-rendementsprofiel | | Text: Alvorens de niet-financiële criteria bindend onderdeel te maken van het vermogensbeheer analyseert een fondsenwervende instelling de financiële impact op het risico-redementsprofiel van de portefeuille. |
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David Walker Netherlands Local time: 07:39
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20 mins confidence:   Risk-Return Tradeoff / Profile
Explanation:
Definition of 'Risk-Return Tradeoff'
The principle that potential return rises with an increase in risk. Low levels of uncertainty (low risk) are associated with low potential returns, whereas high levels of uncertainty (high risk) are associated with high potential returns. According to the risk-return tradeoff, invested money can render higher profits only if it is subject to the possibility of being lost.
Investopedia explains 'Risk-Return Tradeoff'
Because of the risk-return tradeoff, you must be aware of your personal risk tolerance when choosing investments for your portfolio. Taking on some risk is the price of achieving returns; therefore, if you want to make money, you can't cut out all risk. The goal instead is to find an appropriate balance - one that generates some profit, but still allows you to sleep at night.
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