What Unknown Risk Are You Taking

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!

Karl Lavery

Financial Planner & Director