How does MLC manage risk?
Tuesday, December 23rd, 2008
Amidst the media reports of institutional collapses, bail-outs and share market falls, MLC continues to manage your portfolio’s exposure to risk, as it has done for more than 20 years.
Of course our methods of managing risks are far more sophisticated now than they were 20 years ago; however the types of risks haven’t really changed. That’s why MLC’s investment process, which manages risk when markets are rising and falling, continues to stand the test of time. And while many of our competitors have fallen by the wayside in the last 20 years, we have continued to grow to be the largest multi-manager in Australia.
Why do I need to take investment risk?
While most evident when markets are falling, risk is ever-present. However, it’s not something you want to avoid completely because without risk, you won’t be able to grow your wealth sufficiently over the long term to achieve your financial goals. And if returns are the reward you receive for taking investment risk, logic follows that the higher long-term returns usually come from investments with more risk (eg shares).
