Expected return
Risk & psychologyThe return an asset can reasonably be projected to deliver over a long horizon.
In plain terms
Earnings growth plus dividend yield, plus or minus re-rating. Plan at 10–11% for Indian equity.
1678 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 4 terms
Read the full lesson →
Cost of borrowing
Market basicsThe all-in rate you pay on debt, set largely by your credit score.
In plain terms
Any debt costing more than your realistic expected return is the highest-return investment available to you.
Myopic loss aversion
Risk & psychologyThe tendency to hold less of a volatile asset than a long horizon warrants, because the asset is being evaluated over intervals far shorter than that horizon.
In plain terms
Not weakness. Expected return accumulates with time while the scatter grows only with its square root, so at a daily interval nearly half of all observations are losses — and acting on a series like that is a reasonable response to the series.
Staggered entry
Risk & psychologyDeploying a large sum in tranches on fixed dates rather than all at once.
In plain terms
Six to twelve months on fixed dates gives up a little expected return and buys a much lower chance of a first experience bad enough to end your investing.