Risk is not limited to how much one might lose in the markets, which investors call downside risk. Risk also includes opportunity cost or upside risk. While most investors think of an investment’s risk in relation to how much they might lose if it goes down after they buy it, upside risk is how much an investor might miss out on if the markets go up and they’re not invested.
$200 Invested Monthly for 30 Years at Various Interest Rates |
||||||
|
4% |
5% | 6% | 7% | 8% | 9% |
10% |
| $134K | $159K | $190K | $227K | $272K | $327K | $395K |
|
13% |
14% | 15% | 16% | 17% | 18% |
19% |
| $704K | $856K | $1.04M | $1.27M | $1.55M | $1.90M | 2.32M |
Last Updated: 6/25/2018