We next consider the rule that the investor does or should…
“We next consider the rule that the investor does or should consider expected return a desirable thing and variance of return an undesirable thing.”
About This Quote
This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation.
Investors should view expected return as desirable and variance as undesirable, establishing the risk‑return trade‑off foundation.
In simple terms: Return is good; variance is bad.
Key Takeaway
Balance risk and reward in investing.
Themes
finance
risk management
investment
Mood
analytical
educational
Type
financial
theoretical
When to use this quote
- financial planning
- risk assessment
- asset allocation
Key Concepts
portfolio theory
modern finance
Questions to Reflect On
- How does diversification affect variance?
- When is higher variance acceptable?
A Different Perspective
Variance can be useful for diversification, not just a negative.