Investment Risk
There are many ways to assess risk. Risk means different things to different people.
The word “risk” seems synonymous with “loss” or the chance of losing money. For us at Concierge Wealth Management, as financial planners, we seek to separate the concept of risk from loss. To us, risk is an assessment of predictability – how narrow the range of potential outcomes.
Through life, we sometimes need things to be predictable. At other times, we can accept a greater range of potential outcomes, during a given year or for a particular period. This is effectively our willingness to accept risk.
In saving for retirement, during our younger years, maybe during our twenties and thirties, we can afford risk as we are not relying on a given return from investing year on year. As we get older, the return needs to be more predictable, especially during the years immediately preceding reliance on the fund or once you begin to draw benefits.
In every aspect of life we accept risk daily, a range of possible outcomes, with each and all decisions we make. In financial planning terms, our job is to help you assess your acceptable range of possible outcomes and help plan and manage them effectively.
How We Assess Risk
We use a risk assessment process designed by Oxford Risk. Oxford Risk was founded in 2002 by leading behavioural
scientists at Oxford University.
On completing this assessment in conjunction with our detailed discussions with you, we will build you a risk strategy in close reference to you ultimate goals and within an agreed risk budget for each of your financial objectives.
“Never test the depth of a river with both feet.”
Process of Controlling Risk
Aside from our careful risk screening processes, we also have proprietary systems that will keep a sharp eye on the volatility of your investments (a mathematical measure of risk) and ensure your plans stay as predictable as you expect them to be. Obviously, we cannot control markets, but we can assist your understanding of the underlying assets you hold and keep you informed about the suitability of your arrangements over time.