5/30/2023 0 Comments Risk it for the biscuit![]() There is a limpid trade-off that one needs to be cognisant of when deciding upon the asset allocation for the client. Very rarely do clients also consider that risk could also be viewed as not reaching stated objectives, which could range from not outperforming inflation, not reaching the required return objective for their financial planning objectives, or the increase longevity risk. Advisors should manage when the review points should be for clients to avoid this. There is a relationship between how often you view your investment as a client and how likely you are to react to volatility at an inopportune time. A good friend of mine once stated that the most successful investor is someone who forgets their online password to check their statement (in a limited context I may agree with this, especially if volatility makes you anxious as an investor – I am however not condoning ignorance). The client’s response would be a function of how often they view their statements in between the occurrence of annual reviews. Risk is not an esoteric idea as far as the end client is concerned I would be so bold to state that most clients view risk as the loss of capital, with the key question then deciding on whether this includes paper losses (draw downs) in every period short term review period (such as the annual review), or only a draw down by the end of the agreed to term (e.g. One needs to get to grips on the concept of risk. Does this always hold true for investing? Especially in times such as these. Life provides us with many opportunities for us to take a risk and potentially achieve what we want as a result of the accepted risk. As a feeble comedy movie once mentioned, you have to risk it to get the biscuit. ![]()
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