Risk - What Risk?

14-Jun-2008

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‘There is a risk that funds are buying some assets that don’t represent a lot of value at the moment. But the key to the whole thing is as long as it’s appropriately diversified then you’re not talking about a lot of risk to consumers.’ - SMH 27 Dec 2006

‘One approach would be to switch to a low-risk investment option such as cash or fixed interest.’ - Actuary Australia March 2007

H-E-L-L-O !

Superannuation fund members could be forgiven for thinking that volatility of capital is the only risk they have to worry about and that cash is safer than equities. Many retired investors in Westpoint, Bridgecorp et al have found to their cost that aggregation may be a bigger risk than volatility and that fixed interest investments can be riskier than shares. The biggest investment risk is and always has been mismatching asset and liability cash flows.

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