Risk management

Behavioural finance is the study of how psychology and economics intersect to influence financial decision-making. It challenges the traditional assumption of rational economic behaviour, exploring the irrationalities that often drive our financial choices.

Risk tolerance questionnaires aim to identify how much known and unknown risk you can bear. However, when risks are unexpected or difficult to understand, they can lead to behavioural problems in the investing process.

People tend to feel the pain of a loss more acutely than the pleasure of a gain, which can result in the sale of investments after a market crash, driven by a combination of fear and loss aversion.

We have implemented steps to mitigate this:

  1. Complete Risk Questionnaire – our starting point for further discussion.
  2. Understand Your Capacity and Tolerance for Loss - determine the amount you can afford to lose and the amount you're willing to lose.
  3. Evaluate Portfolio Volatility – produce worst-case scenarios, estimated to occur 5% of the time, to ensure you are comfortable with your portfolio risk.

Our process is designed to help you make informed investment decisions and prevent any unexpected surprises.

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Investment portfolio management

Pensions and retirement planning

TESTIMONIAL

“Matthew used his extensive knowledge of funds to set up a well balanced portfolio and has made changes in the light of foreseeable events.”

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