Understanding Investment Risk

The very nature of investing means that all funds carry the risk of losing money as well as the opportunity for gain - some more than others. The risk can be measured by the volatility of the fund, or the amount of 'ups and downs' in its price. Typically, the more the price of a fund fluctuates from month to month, the greater the potential may be for higher gains or losses. So funds with more stable fund prices show less volatility and funds with less stable fund prices show higher volatility.

The concept of volatility and investment risk is often misunderstood. Your Finansec Green Financial Adviser will discuss investment risk with you and ensure that you understand the issues surrounding it.

We feel that it is important to categorise your attitude to investment risk. This will help to concentrate your mind on the issue and also help us to give you the most appropriate advice.

It is also important to understand that your Social, Environmental and Ethical choices will have an affect on investment risk by limiting the choice of investment funds or provider companies from which your adviser can make a recommendation. Your adviser will explain this to you at your first meeting and again in detail when such recommendations are made.