Feeling a little apprehensive lately? I know I am.

So many new market highs. Great returns year to date. It's hard not to think maybe we've had it too good for a while, and that maybe, just maybe, we're headed somewhere other than up for a while.

Days when the market drops 200 points always get me to thinking about where my money is in terms of overall risk and return. I like the thought of having a large percentage of my portfolio invested in high return investments at a time when the market is climbing. When it's falling, however, I'd really like to think my investments are relatively low in risk.

But as you probably know, low risk and high returns don't necessarily go hand in hand in the investment world.

Have a look at the chart below. I've created a simple diagram charting investment return versus investment risk. The horizontal axis represents increasing risk. The vertical axis represents investment return.

If you were to pick where you'd want your investments to be on this chart, where would it be? Right. Wouldn't it be great if we could all just deposit our savings monthly into a Low Risk / High Return investment? The problem with investments, as in a lot of things, you have to give up something to get something. Low Risk / High Return investments do exist. But they tend to attract money very quickly. And that bids up prices, which in turn increases risk.

Nevertheless, in the final analysis, we'd all like to be able to say we "beat the market". And it would be even better if we could say we beat the market without taking on unnecessary risk. That's why I've put the benchmark S&P 500 index in the center of my chart. It seems to me that if I can say my portfolio returns are as good as or better than the S&P 500, and that its risk level is at or below that of the S&P 500... Well that would be something.

So over the coming days I intend to do just exactly this analysis with my own portfolio. I haven't worked through the math just yet; but I'm reasonably confident I'll be able to figure it out. As I do, I'll update my chart and share the results. Let's hope the results are both instructive and not too embarrassing.