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[Updated for 2021] Does your adviser say risk and volatility are the same thing? Read this.

By David Norton - February 28, 2019

Risk and volatility sometimes get confused.

(By financial industry insiders too, with the exception of qualified financial planners).

While one is scary, and the other risky…

They don’t have the same consequences on your wealth.

Here’s why.

Long-term, disciplined investors shouldn’t be concerned about volatility.

It’s short-term market fluctuation that seems worrying now but shouldn’t hold a long-term risk at all.

Risk, on the other hand, refers to a permanent loss of money.

It’s one thing you need to be sure you can handle.

Financial writer and podcaster, Carl Richards, explains why the two often get confused in this video...



The financial world is full of terminology.

Concepts, ideas and nuances.

It’s normal for anyone not in financial services to be a little confused.

Which is where a qualified financial planner comes in.

They should be able to simplify more complex ideas for you.

Always remember...

In investing, simplicity is the ultimate sophistication.

If you aren’t sure whether you have a financial planner or product salesperson, is it time to get a second opinion?

If you found this video interesting, here’s more on the topic:

1. Stock market volatility: What would Warren Buffett do? [Blog]

As a high-net-worth investor, it’s challenging to watch the market’s volatility and watch it reflected in your investment returns.

But one thing is for certain, those who persevere will come out stronger than ever before.

Learn why Warren Buffet suggests the same in this blog.

2. How to manage investment risk [Video]

A healthy portfolio should include a number of different assets.

The main reason for diversifying is to avoid the risk of being too heavily concentrated in one particular stock, sector, country or asset class.

Surprisingly, another reason is to reduce volatility. 

Watch this video to learn how you can invest successfully. 

3. Why you should be optimistic about your investment in 2021 [Blog]

Several commentators have suggested 2021 looks like it could be a "very, very good year".

A far cry from what many of us experienced in 2020.

Find evidence in this blog that, capital market volatility is the price of admission to being rewarded with long-term returns.

4. How to work out your risk capacity? [Video]

Investing always demands some sort of risk...

But what's important is identifying your personal apetite for risk.

Greg Davies, Head of Behavioural Finance at Oxford Risk, shares his thoughts on how  you can properly assess your risk capacity by considering three factors.

More in this video.

5. Why it's time to clear the confusion about financial advisers and financial planners [Blog]

There has always been debate amongst investors about the key differences between the role of the financial adviser and that of a financial planner.

Internationally the challenges are far greater...

There is definitely a place for both services, depending upon who you are and what you might be looking for

This article seeks to provide some clarity on the difference between the two.

Get a second opinion