% $WKLUGGLVDGYDQWDJHRIOLTXLGDVVHWVLVWKDWWKH\FUHDWHWHPSWDWLRQ
:KHQZHGRQ¶WKDYHFDVKRQKDQGZHDUHQ¶WWHPSWHGWRVSHQG
PRQH\ RQ D YDFDWLRQ RU QHZ ZDUGUREH %XW RQFH PRQH\ VWDUWV
EXLOGLQJXSLQRXUFKHFNLQJDFFRXQWLW¶VGLI¿FXOWWRVD\QRWRWKLQJV
ZHFDQQRZDIIRUG7KLVPHDQVWKDWOLTXLGLW\KDVZKDWHFRQRPLVW
FDOOVWUDGHRIIV(DV\DFFHVVWRFDVKLVJRRGEXWZHKDYHWRWUDGH
RIIKLJKHUUHWXUQDQGWKHFRVWRIWHPSWDWLRQ2WKHUDVVHWVDOVRKDYH
WUDGHRIIVDQGPDQ\RIWKHVHWUDGHRIIVDUHUHODWHGWRULVN
Risk
% 7KHVHFRQGLPSRUWDQWIHDWXUHRID¿QDQFLDODVVHWLVXQFHUWDLQW\
DERXWWKHYDOXHRIWKHLQYHVWPHQWLQWKHIXWXUH8QOLNHOLTXLGLW\ULVN
LVVRPHWKLQJPRVWLQYHVWRUVGRQ¶W OLNH:KHQZHEX\DQDVVHWOLNH
a stock or bond today, we expect that in the future it will be worth
more—that it will have a payout that represents the difference
EHWZHHQWKHSULFHRIWKHLQYHVWPHQWDQGLWVYDOXHLQWKHIXWXUH
7KLVSD\RXWLVWKHUHWXUQRQWKDWDVVHW5LVNLVZKHQZHGRQ¶WNQRZ
what the payout will be, and greater volatility in the payout means
KLJKHUULVN
% 0RVWSHRSOHGRQ¶WOLNHWKHXQFHUWDLQW\RIULVN7KDW¶VZK\VWRFN
investors historically have received a higher rate of return on their
LQYHVWPHQWV7KHLUSD\RXWLVPRUHYDULDEOHZKLFKPHDQVWKDWZKHQ
they go to spend the money they invested, it could be a lot or a
OLWWOH5HFDOOWKDWZHJHWWKHPRVWKDSSLQHVVIURPVSHQGLQJWKHVDPH
HYHU\\HDUXQFHUWDLQW\RSHQVXSWKHSRVVLELOLW\WKDWZH¶OOKDYHWR
VSHQGOHVV
% ,I\RXDUHDERQGLQYHVWRUZKRKDVGROODUVWRVSHQGKRZ
PXFKOHVVKDSS\ZRXOG\RXEHLI\RXKDGRQO\GROODUVWR
VSHQG"+RZPXFKPRUHKDSS\ZRXOG\RXEHLI\RXKDG
GROODUV"$UH\RXZLOOLQJWRWDNHDEHWRQVSHQGLQJWKHORZHU
amount or the higher amount? This is the essence of a concept
NQRZQDVULVNWROHUDQFH