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Managing my investments
Managing my investments

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3.1.3 Do we really understand our appetite for risk?

To complete your analysis of understanding risks, watch this video of Sharon Collard’s presentation on the extent to which personal investors really understand the subject when making investment decisions. The worrying evidence about a lack of true perception about risk supports the need for improved consumer education on the subject.

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Clearly, getting a sound understanding of risk and our true appetite for it is vital to ensure we have control of the second stage of the investment planning model. Only then can we move to third stage of investment decision-making.

The four-stage investment management model
Figure 3 The four-stage investment management model