A personal view of investment risk

Recently I changed my financial portfolio to make it more “real”. The overall risk measurement stayed the same “moderate,” but I feel safer now.

When I was reviewing my investments with my financial adviser, I came across a “fund of funds” within my portfolio of mutual funds – something I bought a few years because it was “balanced”. (I must not have been fully awake at the time!)

Digging a bit, I looked at the individual funds (within the fund of funds), some were performing better than others and there was overlap in their underlying investments. Then I realized … this was too abstract for me; I wanted something more real, more directly connected to actual companies.

Now my favorite funds are with a company with a winning investment strategy. I know it’s winning because their performance is excellent and because they have explained their strategy to me in clearly written updates as well as in person. I’m tempted to put more money with them, except they’re a young company … so that would be too risky.

Sometimes risk measures don’t tell the whole story. I want the added confidence of knowing how the fund managers are investing my money.


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