Understanding Investing Understanding the Risk/Reward Spectrum Learn how various investments offer incremental opportunities for potential returns while still mitigating market risks.
In uncertain markets, investors may be holding larger than usual amounts of cash. Incremental “step-ups” in risk can potentially enhance returns while still managing volatility. What this chart shows Financial assets have unique risk/reward profiles. While cash carries the least risk, it also has the lowest return potential. Depending on their risk tolerance, investors can also look to bonds and equities for greater income or appreciation potential. What it means for investors No investment is truly risk free. While cash protects principal, its low returns may hinder you from reaching your financial objectives. You can step up your reward potential by prudently diversifying into riskier assets, which can help mitigate volatility while also keeping goals on course. However, it cannot assure a profit or protect against loss.
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Smart Charts Secular Trends Impact Volatility and Returns Secular Trends Impact Volatility and Returns Over the next three to five years, we anticipate a difficult investment environment, subject to uncertainty and disruptions.
Smart Charts 10-Year Returns of U.S. Median Active and Passive Managers 10-Year Returns of U.S. Median Active and Passive Managers Two bar charts show 10-year after-fee returns for fixed income and equity, (Bloomberg Barclays U.S. Aggregate Bond Index and S&P 500 Index), showing that active managers outperformed passive managers and benchmarks for fixed income but not for equities.
Smart Charts Equity Market Fueled Rising Funding Ratios in Q3 Equity Market Fueled Rising Funding Ratios in Q3 Equity markets continued to rally in Q3, contributing to funded status gains while U.S. Treasury yields remained in a range near all-time lows.
Smart Charts Pension Funding Ratio and Discount Rate Pension Funding Ratio and Discount Rate Funding ratios saw a modest uptick during the quarter, rising 1%.