Their objective is to make a profit, and, often without intention, to do better than they would have done if they simply
accepted average market returns.
Not exact matches
In my view, the necessary objective is to
accept market risk when the likely
return / risk profile is attractive, based on observable measures of valuation and
market action, and to avoid, hedge, or diversify away those risks that don't carry attractive
return / risk profiles on
average.
That objective is to
accept market risk in conditions that have generally been associated with high or at least acceptable
average return / risk tradeoffs, and to avoid or hedge away
market risk in conditions that have generally produced hostile tradeoffs, on
average.
Modern, highly competitive, and real - time securities
markets are auction price setting mechanisms that force the mass of smart and not - so - smart professional and amateur investors to
accept largely
average returns over time.