The recent bout of capital market volatility is a good chance to revisit a fundamental component of capital markets and investing – risk.
In some scenarios, risk seems intuitive and easy to understand. In climbing, it seems pretty clear that free solo climbing (climbing without any aid) is riskier than aided climbing. Risk in this context is great injury or death.
There is no simple explanation of risk in investing.
And, risk can mean different things to different investors. Risk can mean failure to achieve a goal, volatility or complete loss. My suggestion is that considering what risk means to you is a critical component in driving to a sound investment plan.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.