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Module 3 · Intermediate

Return & Risk

How to measure returns properly, why risk is more than volatility, and how diversification, costs and time shape your outcome.

  1. 1Measuring Returns ProperlySimple return, annualised return, compounding and total return – how to measure investment results correctly and why +50% followed by −50% isn't break-even.5 min
  2. 2Inflation and Real ReturnsWhat inflation is, how it is measured, why it quietly erodes savings and which investments have preserved purchasing power over time.4 min
  3. 3Volatility and DrawdownsHow to measure risk – with standard deviation, maximum drawdown and recovery time – and why a 50% crash requires a 100% gain to recover.4 min
  4. 4DiversificationWhy you shouldn't put all your eggs in one basket – how diversification lowers risk, what correlation means and which risks can't be diversified away.4 min
  5. 5Costs and TaxesCommissions, spreads, fund expenses and taxes – which costs eat into your returns, how to minimise them and how investment income is taxed, with a focus on the US and UK.4 min
  6. 6Savings Plans and Asset AllocationHow to invest regularly, what dollar-cost averaging really does, how to split money between stocks, bonds and cash, and why rebalancing works so well.4 min

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