Risk is a difficult concept. It is fundamental to the way investment management is currently regulated, and to the way many investment professionals run their portfolios. The most common definition of risk is past price movements of assets used by the savers. If you buy shares you might experience a large loss in any given year if the market falls or the price of your shares goes down, or you might experience a substantial gain.
The choice of investment manager needs to take into account the manager’s ability to meet modern requirements of risk management, and to have the back-up of good research and global understanding of markets, but also to be able to provide individual service that responds to the client and IFA needs.
John Redwood is chairman of the investment committee at City-based portfolio manager Charles Stanley Pan Asset, and a Tory MP
