Episode Details

Most investors worry about taking too much risk.

But what if the bigger problem is that you are not taking enough?

Choosing how much risk to take with your money can have a huge impact on what your investments are able to do for you. Get it wrong and you could either expose yourself to losses you are not prepared for, or spend years investing only to find you have made it much harder to reach the goal you were aiming for.

And the answer is not as simple as picking conservative, balanced or growth.

Your timeframe matters. Your goals matter. Your behaviour when markets fall matters. Even where the money is invested can completely change what an appropriate level of risk looks like.

In this episode, Paul unpacks the factors that can change the answer, the common ways investors misjudge their own risk tolerance and why the portfolio that feels safest may not always leave you in the strongest financial position.

Inside this episode:

• The risk many cautious investors do not realise they are taking

• Why your risk-profile questionnaire could be giving you only part of the answer

• The scenario that can reveal whether your portfolio is actually too risky for you

• Why being a growth investor does not mean all of your money should be invested for growth

• The timeframe mistake that can make an otherwise sensible investment strategy completely inappropriate

• What can happen when you and your partner have very different ideas about money and risk

• Why someone approaching retirement may need to rethink a strategy that has worked for decades

• The surprising reason a conservative investor may still choose an aggressive investment option

• How to find the point between protecting what you have and giving your money enough opportunity to grow

If you have ever wondered whether you should be taking more risk, less risk, or whether your current portfolio actually matches what you are trying to achieve, this episode will give you a much better way to think about the decision.