#风险回报比 Risk-Reward Ratio: A Key Consideration in Investment Decisions

In the field of investment, the risk-reward ratio is a core concept that profoundly influences the quality of investment decisions and the final outcomes.

The risk-reward ratio refers to the proportional relationship between the risks that may be incurred in an investment and the expected returns. When we invest, we inevitably face risks, which may be caused by factors such as market fluctuations or policy changes leading to a decline in asset value. The returns are the earnings we expect to gain from the investment, such as dividends or capital appreciation.

It is crucial to assess the risk-reward ratio reasonably. If the risk-reward ratio is too high, it means that one may incur significant risks but can only achieve minimal returns, making such investments often unattractive. Conversely, investments with low risk and high returns are naturally favored, but such opportunities are extremely scarce in the market. Investors need to conduct in-depth research and analysis, combining their risk tolerance to find a balance between risk and return.