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    How To Practically Think About Risk and Return | AWM Insights | Financial and Investment News


    It’s been another eventful week in the markets with a stronger than expected earnings season, Bitcoin continuing to reach new highs despite China testing their own digital currency called the e-yuan, and a SPAC bonanza.

    As mentioned last week, Erik, Brandon and Justin spend the majority of this episode discussing how to think about risk, return and allocating capital over the long-term including a framework of how to practically think about risk and return, how to approach long-term investing like a pro, and why ultimately your outcomes matter more than participating in the latest investment fad.

    Episode Highlights

    • (2:04) How to practically think about risk and return
    • (2:46) The basic valuation formula
    • (3:57) Valuing uncertainty
    • (6:23) The building blocks of risk
    • (7:19) Equities
    • (9:13) Municipal bonds
    • (12:08) Interest rates impact
    • (16:33) Will we return to normal at some point?
    • (17:13) Resource: Josh Brown, The Reformed Broker
    • (18:24) Engineered risk
    • (19:16) Manager skill

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