Investors have to accept more risk to meet their goals

Tim Farrelly  |  farrelly’s Investment Strategy  | 09 March 2021

In a low return environment, investors just have to accept more risk in order to meet their goals? On the face of it, this seems self evident and may even have a large element of truth. But, for many, it may be a very, very poor strategy.

Firstly, let’s look at an investor who is currently invested 50% in growth assets in line with their risk tolerance, being their emotional ability to accept ups and downs. The estimated 10-year return on that portfolio is just 3.4% per annum or 1.5% per annum after inflation. Surely it is worth it for this investor to move to, sa...

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