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What On earth Is Risk(y)?



Millions of people world wide avoid financial decisions about where to invest, because of the “risk” associated with that decision.


Risk is defined by the Oxford Dictionary as “Hazard, chance of bad consequences, loss etc, exposure to mischance”. In other words something may go wrong.


If you avoid the risk of losing some/all of your money, it’s imperative that you avoid placing your money in a bank to earn modest fully taxable interest which does match the inflation rate. In that case there is certainty of “bad consequences” because the purchasing power of your deposit will inevitably decline because of the certainty of inflation.


Many years ago I heard a well respected American financial planner say at a national conference “I have all my money and all my clients’ money invested in stocks because I am risk averse”.

Me too!