Investing is all about parking money in a financial product or economic vehicle in the hope of making more money than what was invested. Investors usually factor in many criteria—like returns or holding period or riskiness—to make that decision.

What if there were some hidden criteria that investors do not usually consider? Opportunity cost is one such criterion. It is the cost of missing out on an opportunity to get higher (additional) returns on an alternative investment decision than the one chosen.

Let’s see how it works in different situations.

Read the full article published originally on Financial Express: What is Opportunity Cost and how it can help you take better investment decisions