Risk and Return
At Perpetual we consider ourselves to be prudent investors and generally prefer careful investing for long-term gain rather than chasing unpredictable short-term performance.
That being said, all investment involves some degree of risk.
For most people, risk means the possibility of losing money. But risk is not always a bad thing – it is a normal factor in investing. Without risk, investments wouldn’t increase in value. Often higher risk means higher potential returns.
Risk is commonly measured by the volatility of an investment’s value or price (up or down). For example, shares can be more volatile because prices are continually changing as they are traded many times every day; however, long-term returns from shares have been higher than those from cash or fixed interest. The issue is not how to avoid risk, but how risk is managed and minimised while still ensuring your investment portfolio achieves the returns and objectives you seek.