What is Risk and Why Does it Matter?

Investors’ risk tolerance is driven in part by their personality, with some people wired to seek out danger and others preferring to play it safe

Ben Johnson 11.09.2018
Facebook Twitter LinkedIn

Stock market risk

Do you remember what risk feels like? While the market has wobbled during the current bull run, the ride has generally been smooth: stock market volatility has been trending below its long-term average for 68 months. This marks the third-longest stretch of below-average volatility for the index dating back to 1939. The next longest period lasted 75 months, from March 1956 through May 1962. So, the current streak is unprecedented in the experience of most investors.

The most common definitions of investment risk are rooted in uncertainty. How likely is it that the returns on an investment will deviate from the expected returns, and by how much? 

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Member.

Register For Free
Facebook Twitter LinkedIn

About Author

Ben Johnson  Ben Johnson, CFA is the Director of Passive Fund Research with Morningstar.

© Copyright 2021 Morningstar Asia Ltd. All rights reserved.

Terms of Use        Privacy Policy