We have a whole industry devoted to the financial measurement of risk and a regulator that seems to think it is sufficient to put a number against it.
You can guess from my slightly cynical tone I am not a great fan of this system of apparently matching an investor's 'risk appetite' with a financial product. Quite simply, risk for me is measured with an answer to the question of an individual's capacity for 100% loss of capital and the possibility of that happening with an investment over a given time period. For example, if an investor puts money into the UK or US main equity markets with both at record highs, then the next move for those indices is 50:50 either way. Is that a high or low risk investment? Is the risk of an in...
To continue reading this article...
Join Investment Week for free
Signup and gain exclusive members-only insights - all free of charge!
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes
