Volatility is not the same as risk

My colleague Nader Naeimi has said “volatility is an unexpected deviation in the path to an investor’s destination (ie, the investment goal) which can lead to both risks and opportunities. Risk is the probability of not reaching the destination (ie, failing to achieve the goal)”. In other words, there is much more to risk for investors than volatility. There are several points to note when thinking about volatility and the risk of not meeting your investment goals. High levels of investment market volatility often indicate opportunities for investors as it invariably surges during share market slumps like those seen into 2003 and 2009 as this is when shares are selling cheap. In fact, periods of low volatility when markets are smooth and investors relaxed can be periods of maximum risk. Time is on your side when it comes to investing as it smooths out short-term volatility. Read the full story in the latest Oliver’s Insights: (VIEW LINK)