Many of us are familiar with the popular saying; “there’s no such thing as a free lunch”.  Essentially, to get one thing that we like, we usually have to give up something else. In finance, the trade-off is between risk and return. For example, the day to day fluctuations in the value of a stock are much larger than those of a government bond. Risk is typically compensated through a higher expected return. The ultimate goal is to have a portfolio of investments that obtains the best return for the amount of risk you are taking.