The myth that those wishing to reduce risk are old, inexperienced, don't understand investing, or are scared.

I'm none of those yet I just don't like to guess, gamble, or continually speculate.

Risk is also the risk of taking high risk and losing to the point where the lower risk approach there forward is no longer enough. Had they instead stuck with lower risk all along, it would be.

Or, it would take too long for high risk. While many will speak about the long term edge of higher risk, we must consider how long we wish to wait. Just because you MIGHT live to 100 is no reason to expect to. Nor should you prepare for that if it entails taking more risk. Sure, be smart, save, etc. But why take higher risk for low odds occurences, ESPECIALLY since taking higher risk is by no means a guarantee you'll even do better (in fact, average real world investors do worse).

The key is not the date you die but through the date you are coherent, value money, need ALL of the money. If a person were to live to 80, at 70 they won't need as much as when they were 60.

But, they don't mention all those who were in for years then the market tanked. By the time the market recovers they'll be at the anticipated end date of their term. BUT, wall street will be showing high risk return from the bottom through the top. Or, if they show another start date, they'll start before that investor started or some other bottom.

Sadly, we are not able to go back in time and choose different start dates, purchasing, etc.

Despite the hype, there is a level of risk that real world investors should not exceed. You won't hear this because there is no incentive for the industry to say this.

Real world investors have significant constraints while their competitors have enormous advantages. The key is not so much skill but being able to bet big, lump sum in/out, being certain, being unaffected, etc.

They like to generlize that it's either you prepare for retirement by taking higher risk OR you don't prepare for retirement (as if that's the only alternative).

Big opportunity orienation rather than making it up in my head. The best investing is when the market provides the opportunity rather than being arrogant thinking you can get blood from a stone.

Too much additional time. The higher the risk the more time I feel compelled to put in.

Excessive trading.

Having to use defense even when the odds say stay (becuase the potential negative consequences are enormous).

Risk/return is theoretical. The greater the risk the more it's just "in theory". If not, everyone would bet the ranch and get a good return.

You must get many other things right. High risk is simply that SOME high risk things have higher potential. Just because something has more risk does NOT mean it necessarily has greater potential. there are countless high risk scams that I get in my email.

High risk means high odds of failure. If it were high odds of success, it wouldn't be high risk. How can you get 10%+ with low odds of failure? I guess the downside has to be huge. Look at the risk scale: Tbills on one end, lottery tickets on the other.

High risk varies. From max. high to just high.

Odds vary.

Payoff varies even if the same odds/risk. One slot machine has same payoff yet better odds. One game has better odds than the other yet hte same payoff. One state's 5 # lottery had 500,000:1 odds and a $100,000 payoff. Another state had the same payoff and yet 350,000:1

Never assume the odds makers are all the same. And, all are equally ethical or knowledgeable.

There are many asset classes that are higher risk than stocks yet have lower potential.

Besides, potential is not enough. What are the ODDS OF REACHING THAT POTENTIAL?

Consequences?

How much time does it take?

I may be fine with that kind of return if given to me today, but not if I'll be ancient when I get it. If the net return is 5% (don't fixate on gross returns), that will take about 14 years to double (using the rule of 72, as my calculator isn't handy). But, as we age, that is ever less worth doing. Not only would we have 14 fewer years to enjoy it (if any), there's a point in our life where quality slips and/or you don't even need half of what you got (especially given the annual income generated off it).

Sure, you hear rich cats saying do that, but that's only because they have tons of money to live on outside of any buy/hold, high risk bet they MIGHT have (though it wouldn't be the first time a person said one thing and did another). And/or a high salary. It's one thing to do that if you are living it up meantime and will never need that money (it's pure gravy if you win, and nothing if you lose).

Instantaneous results where your only money at risk is the initial bet. Lottery vs. penny stocks.

The great myth of compounding hypesters is that your only risk is the inital bet! Try telling that to people in 2002 who had lost thousands. As if they were happy being told: John, you only bet 10,000 way back in 1990 so you didn't lose a penny. Nonsense. Subsequent amounts are your capital, your bet. Worse, they are higher dollar amoutns, probably higher % of your net worth, and you are OLDER and will defintely lose more than you've ever come close to losing even if you lose the same % as the last bear. 

Losing 50% of a higher amount when you are also older is NOT the same.

The closer you get to good enough the more you will LATER (after the INEVITABLE fall or just slowdown) regret having not reduce the risk. THe problem is that late bull your inhibitions will be lowered and yo won't be thining clearly (hyped left and right).

Deliberate, overly careful. I tend to double and triple check. As such I can't have too many aggressive positions. Imagine how draining this is if you have a few positions to monitor. Egad. The higher the risk, the more overly careful.

Annoyance.

It jusn't isn't wise to bet the ranch. Yet, in aggressive investing you have to bet a ton to have a shot of making it pay off. The odds are low you'll even beat market level risk. Since you're taking more risk you should beat the market or else it was a waste. And, beat it significantly. AND, add a significant chunk of money.

It just isn't right that you would ever bet and suffer excess stress, lost sleep. Why PURPOSELY seek out situations that guarantee this? There's enough stressful things beyond your control that you are FORCED to deal with, why add more?

It should not be the case that any bet would negatively impact you now or in the future. Why let OTHER PEOPLE'S whims impact you? The higher your risk the more you are at the mercy of others. I jsut don't want other people pulling my strings. I am not a puppet.

It's not about cowardice, lack of experience, ignorance, lack of investment knowledge that leads one to respect money and seek to minimize loss and PRESERVE what I have worked hard, put in time, and make good decisions. It's the opposite. Just as I want to preserve what I have in "regular life" my car, house, musical instrument, baseball card collection, so to do I seek to preserve my money. I wouldn't leave out my computer in direct sunlight. Does that make me a coward? That computer represents money.

I want to LOCK in my past smart decisions. Why continually subject it to reversing those? Just like I wouldn't want an old boss sending a bill for the salary I have been paid.

I want to LOCK in gains from time and effort I have put in. Why chance losing it and thus all the years? You can't get that time back. If you lose it, the whole period was a wash. Any subsequent gains are SEPARATE and past is still, and always will be a total waste. Is having a respect for my time and demanding compensation be retained ignorance?

The older one gets the ever more likley that a lower risk approach will provide ENOUGH money. If they have to lower costs, big deal. They don't live worse than the guy sweating every down day, who knows DEEP DOWN that he's just guessing and has 0 control over the outcome. The gambler does NOT live better during the period. Maybe brief excess up days.

Desire to do well. Pride.

Desire to maximimize my inputs of experience, time, understanding.

My objective is to take risk to the point where an additional unit of risk the odds drop too much and the downside damage is too great. And, where my inputs have as much or nearly as much influence or results but if wrong (as will happen) it won't be a big deal.

Rem, it's NOT just about affording to lose the money.

Reconigntion, that gulp, I'm NOT perfect and make mistakes. Yet the higher the risk the more perfection is required and the bigger the damage if anything less than perfect, if not this draw of over next 2-3 years, EVENTUALLY.

I sometimes spill milk. Now, if I spill milk even though I know how to pour milk, have decades of experience, have an extremely high "win rate", I still screw up. Even though there's no risk, I'm not betting big and thus there's no stress, I still manage to spill milk sometimes! Imagine if one time it would turn your net worth into pennies. Or, at least make it so you didn't beat a significantly lower risk portfolio. I don't want one mistake to crush me.

Net returns are what I look at. Higher risk looks nowhere near as good as at the gross level (which is what you are shown - and for good reason). But, why would I take risk for a payoff I can't realize? I am taking on too much risk. I am sayig that okay, I'm willing to take x risk for 11%. But, in reality, I'll get the net return of say 5%. I should instead ask how much risk I'm willing to take for the NET RETURN. Well, it could make all the difference in the world. The gross return doubles about every 6.5 yeears. But, 5%? Every 14. No dice IF it's high risk where the ACUTAL ROR is a pure guess and if it's late bull, odds are that 11% is pie in the sky. And, if I do as average investor does, I'll do significantly less.

If someone said they'd pay a person one million dollars to walk through Bagdad with an American flag, some people would do it. BUT, you had to bet as they boarded the plane they were told: Oh, by the way, that's the GROSS return but after taxes, fees, etc. your net payoff is one dollar but, "it's higher than the return of 50 cents I'll pay you to get off this plane and sit in that safe hot tub". Many will advise you to take the bet because afterall, it offers a HIGHER REUTNR than the low risk alternative. And, they aren't familiar with net return and only fixate on GROSS return (very common, actually).

One dollar vs. 50 cents aint squat differential, anyway. Just becuase it's "twice the return" it's not worth risking your life for. Even if the odds were decent.

Anyway, the second your feet hit Bagdad, you'll never see that guy again anway.

"Joe, are you crazy! One million dollars (THEORETICAL gross return: He has NOT guaranteed it and you have to live and then deduct costs, etc.) is higher than 50 cents". And, they will say "See, high risk = better return". So much for better.

This is what you hear on Wall Street. You read into it that it's a guarantee but they didn't say that. They know full well you will think it's a guarantee. Many will think "Of course, it'll happen they just can't say it specifically become fuddy-duddy, inexperienced, cowardly politicians who don't know jack about investing."

Better is not enough. I won't bet much of my net worth for merely a SHOT at better. Not only is it just a shot (if all goes well), better is not enough. Having a few more bucks with 6 years to 6 feet under won't do me jack squat.

Signifcant, life changing difference where the lower risk doesn't lead to "enough" money such that I can't live on it and the income.

Even if lower risk lags, it will still cover you for some time. So, even if in 20 years lower risk does less and won't enable you to live another 20 years, the first 20 you lived as well. And, maybe 19 of the last 20 as well as the next guy. I'll take my chances.

The higher the risk the more the rate of return is a pure guess.

I need a big fat cushion. 5% net return doesn't cover it.

Most aggressive funds lag the market. Why go against the odds?

Aggressive funds are very inconsistent. This is not my lack of experience of my ignorant methods. Look at the methods of others pushing aggressive investing. Look at history. Look at metrics provided by major mutual fund services. Absolute or relative performance, etc.