Taking the right investment risks is the key to creating wealth. To take the right risks you need to understand which risks will deliver the returns you need at a level of volatility that you can handle. Then you need to find the fund manager that follows the investment philosophy that will deliver the returns you need over the period for which you will invest, with an acceptable level of ups and downs in your capital in between. Rob Formby, chief operating officer-designate at Allan Gray, says a recent report reveals how US investors are playing it too safe to achieve their retirement savings goals. He thinks local investors are also too cautious as a number of Allan Gray investors attempt to keep the volatility of their investments low. "As an investor, your risk tolerance is key to your financial freedom. While all investors want to avoid losing capital at all costs, playing it too safe, or being too conservative, can result in the loss of long-term returns." To those shying away...
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