Risk and return: what every investor needs to understand

There is no such thing as a risk-free investment. What exists is what we call “misunderstood risk.”

Every investment presents a direct relationship between risk and return. In general:

• The higher the potential return, the greater the risk involved

• The lower the risk, the more predictable the return tends to be

The most common mistake is investing without understanding:

• The true level of risk;

• The time required for the investment to mature;

• The expected volatility;

• Compatibility with the investor’s profile;

Understanding risk does not mean avoiding it entirely, but assuming it consciously and strategically.

At Norvia, we guide our clients to deeply understand this relationship before making any decision, building balanced and consistent strategies.