Investing is an essential part of financial planning, but it's not without its risks. As investors, we navigate the fluctuating seas of market volatility, where the potential for profit (return on investment) serves as the guiding North Star, and risk is the unpredictable storm that could emerge on the horizon. This article will delve into the risk-reward ratio in investing and provide tips on managing investment risks. Risk and Return: Two Sides of the Investing Coin In the world of equity investment and bond investment, risk and return are tightly intertwined. They represent a fundamental investment strategy principle: the potential for higher returns usually comes with a higher level of risk. Risk refers to the degree of uncertainty or potential financial loss inherent in an investment decision. In contrast, return is the gain or loss made from an investment, often measured as a percentage increase over the initial investment cost. Typically, if you're looking for opportunit...