Presenter – Emma-Lou
Risk is an unavoidable part of life, you can't remove it altogether and you wouldn't want to because the flip side of risk is reward. What really matters is how you prepare for unexpected.
I'd say I've got a pretty healthy appetite for risk providing the rewards great enough. I rowed across the Atlantic with the reward being a world record and the risk being potentially catastrophic.
I think we consider ourselves, both of us, fairly risk averse people, that's not to say we don't enjoy a bit of adventure now again. I think with the travelling we do, adventure is, is a part of it. But in terms of investment and finance we are cautious people by nature.
In life I'm not really a risk taker I'm, I'm a project manager so I'm a professional worrier. I worry about making sure my projects are on time, they're on schedule, within budget, my clients are happy. However with my money I find I'm actually a bit more of risk taker, um a little knowledge goes a long way. I'm able to make more informed decisions and it's allowed me to make sure that my money works that little bit harder for me.
I think we are much more risk adverse.
Now we have a baby.
Of course not going back to work uh my decision to do that is um for now, um there's a massive risk going down to one salary, but we had weighed that risk before we didn't just do it and think, oh I hope it works. We have looked at our finances...
... and we know that I can not work for a sh..., a short amount of time and we enjoy being Una and then...
Yeah, and Una can enjoy being with us as well.
I think my attitude to risk has definitely changed over years. The closer that I get to our goal of putting down a deposit for a house the more risk averse I get really, because the idea of losing say 20% of our savings in a short space of time and then having to save for another extra year before us actually buying our house. It doesn't seem very appealing at this point, and I think I'd rather forego the extra return and, and try and limit the risk. Obviously stock markets are affected by news every day, so especially at, at the moment there's a lot of turbulence with geopolitics, but I think overall I know that in the long run markets to tend to go up and they're, at the end of the day even though they may..., might take a hit because of some news, in the long run I'm willing to take the risk.
To be honest I don't know a lot about the financial crisis in 2008, but I do know that it's coloured my generation's view of the industry. There's a perception that investing is always gonna be high risk and you haven't got that choice or control in what you invest in, but that's not the case, there's always gonna be periods of volatilit, but being a young investor that doesn't really matter. If you're investing for the long term it allows time for your portfolio and investments to grow, but also to average out the peaks and troughs.
I think now later in life we're probably taking more risk in terms of finances than we did earlier on but that's really a function of understanding more about the risks we're taking, but at the same time we do realise that it's sensible to have a mixture of assets. So we're careful to, to put our, our, our finances in different places, and I think with age comes the realisation that um over time the, the longer term view normally wins out
When we were rowing across the Atlantic there were many ups and downs, and we knew we had the right kits, um we knew that if we didn't do anything rash the boat would, would stay afloat and it's much like with our investments. The market tends to, to tick up, if we do take a hit, the 20%, a 20% hit, it's likely that if we hold on and sit tight for a little bit longer we, we will reach our end goal, and it was very much like that on the Atlantic, we knew we were gonna get there, we just might not get there as quickly as we hoped.
If I was talking to someone who was much younger I'd actually say to look at the opportunities that the stock market investment gives, and particularly at their stage of life the, the risk is much lower simply because they have a much longer term to invest in the market. And history shows that over time stock market investments have always proved to be a good bet, as long as you're in it for the long term and not just for next year.
The markets can go up and down, how you cope with that changes over time. Younger people can embrace smart risk for their investments, for older people especially those living off their investments it's about managing the the risk so they don't derail their plans. It's how you respond to volatility that matters, if you panic and sell you'll probably lock in a loss. Invest through the market's up and downs though, and you may get more for your money in the long run, and being well diversified means you're even more likely to have a smoother investment journey.