Greg Davies: Combatting the risk of risk mismanagement

Meet emotional-comfort needs

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Greg Davies: "Why give up on a good destination when we could simply change how we are likely to behave along the journey?"
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Greg Davies: "Why give up on a good destination when we could simply change how we are likely to behave along the journey?"

Risk management is not about avoiding risk as that means sacrificing the chance of gains. Instead, explains Greg Davies, risk management is about achieving the best deal for the risks investors choose to accept

As a supplement - or possibly, in some more care-free circumstances, a substitute - to a psychometric assessment of risk tolerance, an adviser may sketch a chart like the one below and then invite an investor...

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