does more risk = more rewards

Does More Risk = More Reward?

Growth assets are return-seeking assets that aim for capital growth.

These types of assets can often have the potential for higher investment returns over the longer term, but they also tend to have higher investment risk and likelihood of their value rising and falling, either a little or a lot, in the short term.

Defensive assets, also known as income assets, are generally those that aim to provide income and modest growth.

These assets generally have lower investment risk, with more stable returns in the short term, but also generally have the potential for lower returns over the longer term.

Typical investments in a defensive strategy include high-quality short-term providing steady interest return and blue-chip or defensive stocks.

Growth stocks come from companies that grow their sales at high rate and rarely pay dividends such as Netflix and Tesla. Their stock price tend to be pricey.

A growth stock will plateau and the growth experienced will slow substantially or stagnate.

Defensive stocks come from companies that are not affected by inflation, recession or pandemic. In the midst if market uncertainty they will continue to pay out dividends. Such companies are the ones we heavily rely on in the industry of Healthcare (Pfizer), Utilities (Waste Mgt) and Consumer Staples (P&G)

Blue Chip stocks come from companies that have a strong reputation and stable earnings such as Microsoft & Apple

Wealth strategy can either be a growth strategy (trying to build your wealth) or a defensive strategy (trying to protect your wealth).

This will depend on your risk tolerance and your level of understanding the stock market.