Investment Risk is Inevitable

Sep 2005 //
Risk vs. Volitility

Waiting for a rosy outlook is like waiting for the perfect investment. Searching for the perfect stock—one with little risk, a promise of excellent returns, a highly competent, shareholder-oriented management, and a bargain price— is likely to be unproductive and disappointing . In today’s semi-efficient markets, the reality is that wherever most investors see low risk and a very promising operational outlook, stock prices are likely to be too high to provide either a high return or a relatively safe one.  Further hindering the search for the perfect investment, share­holder-friendly company managements are not especially plentiful.