What we know about risk is all wrong

The chance that an investment’s actual return will be different than expected. Risk includes the possibility of losing some or all of the original investment. Different versions of risk are usually measured by calculating the standard deviation of the historical returns or average returns of a specific investment. A high standard deviation indicates a high degree of risk.

Read more: Risk Definition | Investopedia http://www.investopedia.com/terms/r/risk.asp#ixzz3qE2I9SPs Follow us: Investopedia on Facebook

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As you can see from the above, Investopedia defines clearly what risk is. Schools preach on what risk is, how it is calculated and how it is quantified. But after reading this …

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