Understanding risk and return: a guide for investors

As the investment landscape evolves, new trends, asset classes, and a changing macroeconomic environment alter traditional investing norms. So when it comes to achieving investment goals, the balance between risk and return has become a critical consideration. 

With new trends, emerging asset classes, and fluctuating economic conditions, traditional norms for managing risk and maximizing returns are evolving. To make smart investment decisions, we suggest investors familiarize themselves with risk and return in investments. This article offers a detailed look at various asset classes to explain the risk-return tradeoff and help investors manage risk in investing, particularly in 2025’s unique market environment.

For those looking to build a diversified portfolio, understanding how to calculate risk and return can be a game-changer. By gaining insight into high-risk, high-return investments versus low-risk, low-return investments, investors can better match their financial goals with their risk tolerance. 

To deepen your knowledge, read our guide on risk diversification and learn more about the Mintos approach to managing risk and return in investment portfolios.

In this guide, we’ll cover

  Risk and return in investments
Risk vs. return across asset classes
How to calculate risk and return
Examples of risk and return in investing
Risk-adjusted return and why it matters
High-risk, high-return vs. low-risk, low-return investments
Managing risk in investing today
Investment strategies for 2025 and beyond

>  Learn more about understanding investment risks

Risk and return in income-producing assets