The Daily Reckoning UK

Risk And Reward

REVEALED: When it comes to investing, if you want the best chance of consistently beating the market over time, then you need to know:

The Single Most Important Idea In Investing

PLUS: Right now, you can download a FREE copy of a new investment briefing I’ve put together uncovering how regular people can get an edge over professional investors – just enter your email address below:

Dear Reader,

Here’s something you need to know about investing…

Financial markets often pay you more – in the business we call it a ‘premium’ – for taking on more risk.

So, you could basically make significantly greater returns by investing in what are considered riskier things like shares, than more traditionally safe things like cash or bonds.

To see what I mean in action, just take a look at this chart…

Annualized Performance 1999 to 2011
Source: ThisisMoney.co.uk

It shows the difference between putting your money in bonds and investing in UK shares over the last 110 years.

The difference is so huge that they’ve had to squeeze the chart right up to fit shares on the same chart!

As you can see, overtime it pays to be invested in shares.

But here’s the thing: this is just the start of it. There’s even better news…

Because when you start focusing on small shares, the potential reward gets even better.

In fact, if you want to see just how effective it can be investing in small shares, pop your email address in below and I’ll send you a copy of The Simple Secret To Investing In Small Companies for free…

Plus I’ll also update you on the latest exciting investment opportunities in my free email newsletter Risk and Reward

Introducing The Small Company Effect And The New Research That Will Help You Unlock Its Secrets

When computers came onto the investment scene back in the 70s, academics started to put them to work analysing returns from the stock market.

One of the first things they spotted was a weird pattern in the returns from small company shares.

By the early 1980s, all the researchers and academics were in agreement: decades of data showed that small companies performed better than big companies… and the smallest companies performed better than merely small companies.

The academics called it “the small company effect”.

For those investors lucky enough to know about it, and take advantage of it, the results have been astonishing. For example, for every £1 you had invested in small companies in 1955, you’d have made FOUR times more by now, than investing in bigger companies.

Not bad. But…

If you invested in the very smallest companies, you’d have made TWENTY times more than investing in bigger companies.

Now you’re talking, right?

And it’s all because the smaller the company is, the more risk you need to be prepared to take on. In other words, the more likely it is that the company will fail or that you won’t be able to get your money out.

Hold on, though. You might be thinking: this all sounds good… but I don’t want to take on more risk.

Well, here’s the thing…

I recently discovered a little-known academic study that has potentially uncovered a way to weed out all the small companies that are most likely to fail so that you can more easily avoid those companies and potentially reduce your risk…

Whilst still enjoying the same reward.

Sounds good, right?

Indeed, I’ve detailed the full story in the investment special you can download for free right now. All you need to do is put your email address in below and I’ll send you my research in your first issue of my Risk and Reward email newsletter:

For me, understanding that taking on more risk can bring you much bigger rewards is a key lesson to learn when it comes to successful investing…

But things get even sweeter when you discover ways to reduce the risk WITHOUT reducing the reward. That’s what I think this new discovery could help you achieve.

Best wishes,

Sean Keyes

Sean Keyes
Sean Keyes
Editor, Risk and Reward

Enter your email address below and I’ll send you a copy of The Simple Secret To Investing In Small Companies for free in your first issue of my Risk and Reward email newsletter:

From time to time we may tell you about regulated products issued by Agora Financial UK Ltd. With these products your capital is at risk. You can lose some or all of your investment, so never risk more than you can afford to lose. Seek independent advice if you are unsure of the suitability of any investment.


How to claim multiple £100-£300 a month from the stock market

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