Risk never looks risk, when generating a high return!

For many 'Risk' is only when they encounter negative returns, whereas, by definition, any unexpected outcome whether positive or negative is a Risk.

However, in the investments, we only see 'High Risk' when the portfolio is not performing, returns are muted and we struggle with negative or below FD returns. But we ignore the risk altogether when bull really resumes, suddenly we start getting huge returns, and many of us start chasing the crowd.

The rule of wealth creation says rather than watching the portfolio returns, better to monitor your asset allocation! One should not exit from the market saying it's too high or take entry just to ride an ongoing rally. Profit booking and/or top-up in Equity should always be on the basis of allocation and not because of market phases.

The perception of risk and actual risk of investing move in opposite directions. When the market crash by 40% - 50% like in the years 2000, 2008, 2020, people perceive the investments in the market as riskier while the actual risk was low at that time as valuations had gone cheap after the crash. In a bull market, the perception of risk is very low despite the market hit a new high every day. However, always remember that big returns don't come with taking big risks!