Quora Answer: Is There an Investment Option of Low Risk & Average Gains?

The following is my answer to a Quora question: “Is there an investment option of low risk and average gains?” 

These concepts, low risk, and average gains, are relative.  One person’s low risk is another person’s intolerable bet.  As such, I will address this from my perspective, and give one example. 

Investing in equity funds would be considered intermediate to high risk.  But when you understand the market, diversify your investment across regions, sectors, and industries, and even asset classes, you have mitigated your currency and political exposure.  Another consideration is to choose foundational industries.  For example, investing in a mobile phone company may be high risk, since consumer tastes can change, but investing in the chips, the underlying technology is safer since regardless of the mobile phone company.  That is a safe investment philosophy.  In terms of gains, well managed, you should expect returns of between 4.5% to 6%, and that would be average.  Anything more than that is above average.