It is often the case that advisers, brokers, fund managers and their clients do not fully understand the degree of risk they are taking, particularly following sustained periods of benign market conditions, such as those we are currently experiencing. With that in mind, I thought I’d provide you with a timely piece of poetry.
Do you truly know, what risks you take
When on the markets you place your stake
When times are good and the markets are Bull
You feel good, as you see your coffers are full
The world seems good and your share seems fair
But that’s not the case, when markets turn Bear.
Memories are short, when you’ve secured good gain
Many forget such risk, often comes with great pain
To beat the markets, with the promise of plenty
Yet managers who do, are less than one in twenty
To panic and sell, if your investments fell by a quarter
Indicates you may be risking more than you oughta.
For the higher the chance of making good gain
So much greater is the risk of financial drain
Would it not be better to know what return you need
To enable your wealth, your goals and lifestyle to feed
Then check that against what degree of risk you can stand
And see if they work as they should, hand in hand.
The evidence is clear, risk and return are linked
But that’s only if you haven’t panicked and blinked
If it’s the case your risk and needs do not tally
Then seek good advice and please do not dally
A good financial plan, with the right portfolio to match
Means you no longer have to batten down the hatch.
You can then face the future, with complete peace of mind
Leaving beating the markets to the blind leading the blind!
Financial Planner & Director