Investors need to take risks to achieve returns, but do you really understand what risk means? Dr Benjamin Holdsworth shows how risk is connected to your long-term objectives.
Investors know that equity markets can be risky. The trouble is that ‘risky’ means different things to different people.
William Bernstein – a neurosurgeon-turned-adviser and prolific investment writer – wrote a great, short booklet on risk, where he explained the different risks that equity investors face, as follows:
‘Risk, then, comes in two flavours: “shallow risk”, a loss of real capital that recovers relatively quickly, say, within several years; and “deep risk”, a permanent loss of real capital.’LOGIN OR REGISTER TO READ MORE……………