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Newsletter: Investment Insight

Balancing Risk and Return

Buoyant equity markets can also give confidence for individuals to take greater risks. Often, stronger markets help to drive new innovation, which can create further challenges in assessing risks as expectations are largely driven by hope and uncertainty about the future. When rapid change leads to quick profits, it can encourage risk-taking behaviour and create froth in the markets.

It’s easy to get caught up in the excitement — we’d all like to ride the next superstar investment to financial freedom. We may also feel that we aren’t successful investors unless we are in the middle of the action. But, too much enthusiasm for what appears to be a good opportunity can often prove unsustainable; the warning signs sometimes only apparent to the astute.

Click here to read the Summer 2021 Newsletter