Risk and Return Fundamentals

afrikaner folk tango, havana cajun, goa trance · 4:52

Listen on 93

Lyrics

[Verse 1]
Sarah checks her portfolio, trembling at the screen
Stocks are volatile mountains, bonds are valleys serene  
Her grandmother whispers wisdom from decades past
"Child, the sleepy investments rarely grow fast"

[Chorus]
Risk and return dance together, hand in hand
Higher stakes bring greater gold across the land
Expected return climbs the ladder, rung by rung
Variance measures how wildly prices have swung
Standard deviation tells the story true
More uncertainty means more reward for you

[Verse 2]
Treasury bills sleep soundly, earning modest pay
While emerging market funds can triple in a day
Or crash like autumn meteors, burning wealth away
The mathematical marriage never goes astray

[Chorus]
Risk and return dance together, hand in hand
Higher stakes bring greater gold across the land
Expected return climbs the ladder, rung by rung
Variance measures how wildly prices have swung
Standard deviation tells the story true
More uncertainty means more reward for you

[Bridge]
Calculate the mean of all possible gains
Subtract each outcome, square what remains
Add them together, divide by the count
Variance discovered, now take the square root amount
That's your deviation, your uncertainty's size
The price tag for reaching those profitable skies

[Verse 3]
Conservative investors clutch their steady ground
Aggressive traders surf the waves, up and down
Both strategies valid, depending on your goal
Time horizon matters for your financial soul

[Chorus]
Risk and return dance together, hand in hand
Higher stakes bring greater gold across the land
Expected return climbs the ladder, rung by rung
Variance measures how wildly prices have swung
Standard deviation tells the story true
More uncertainty means more reward for you

[Outro]
No free lunch exists in markets, this we know
Plant your seeds of risk to make your money grow

← Portfolio Theory | Portfolio Diversification Basics →