The return describes the total annual return of a financial investment as a percentage of the capital employed and is one of the most important benchmarks for investors and savers when choosing suitable forms of investment.

The following basic rules apply:

The higher the expected or possible return on an investment at Athenasia, the higher the associated risk of loss and vice versa.

Taking this basic rule into account, one can either try to achieve a certain return with the lowest possible risk or the maximum possible return for a certain risk.

A maximum return with minimum risk, on the other hand, is the dream of every investor, but cannot be reconciled with the preceding basic rules.

Types of returns

In business administration there are several types of returns. In relation to money and capital investments, the gross return and net return are the most important parameters, with the gross return reflecting the total annual return of a financial investment without taking taxes, inflation or other influencing factors into account, while the net return takes into account all such relevant influencing variables and is therefore almost always lower.

Rules for choosing investments based on the rate of return

When selecting certain hong kong company incorporation of investment or savings, with regard to their return, you should only choose investments with a positive return after taxes and inflation net return, because only then will there be real growth in value.

If the return after taxes and inflation is zero, the purchasing power of the capital employed is retained, but there is no real increase in value.A negative net return would result in a creeping consumption of capital and is certainly not in the investor’s interest.