Dan differentiates between investments he considers 'base hits' with lower risk and lower potential returns, and 'grand slams' with higher risk but the potential for massive returns.
The concept of risk and return is a central tenet of investing, as it underpins the decisions that investors must make when allocating their capital.
The podcast episodes explore this topic in various ways, with discussions of investment strategies that balance risk and potential returns. For example, in episode "How Sim Plans to Retire by 40: The Financial Independence, Retire Early Method", the hosts discuss Sim's approach to managing risk and return in her investment portfolio, which is a key consideration for anyone pursuing financial independence and early retirement.
Other episodes, such as "Should You Invest in Shares or Buy a Rental Property" and "How Should Fund Managers Approach Pension Plans in Private Market Investing? Featuring Edward Comerford", delve deeper into the trade-offs between risk and potential returns in different asset classes, including stocks, real estate, and private markets.
Overall, the podcast episodes highlight the importance of understanding the relationship between risk and return, and how it can inform investment decisions and strategies.