Returns Risk Broyhill Asset Management

Risk And Returns: A Dangerous Mindset – Broyhill Asset Management

Risk and returns - A Dangerous Mindset - Broyhill Asset Management.

Key Takeaways

  • Artificially low rates have pushed prices artificially higher
  • Higher prices today = lower returns tomorrow
  • Different results require different thinking

Risk and returns at equilibrium
This is a scatter plot of asset class returns and volatility. The regression line depicts the risk-return trade-off under these equilibrium assumptions. In other words, the higher you move up the return scale, the further you move to the right on the volatility scale. This is normal. Generally speaking, more “risk" equals more . . .

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