Kirstie Spence

What is your attitude to investment risk?

I think the main thing to understand is that you cannot, and will not, know everything or have absolute certainty. So, you need to understand where the risks are, mitigate those you can’t control, or don’t feel you have an edge on and then focus on taking active risk where you do have extra insight or knowledge. Knowing when you know enough to take action, rather than trying to know everything; and knowing where you could be wrong, so being alert to that, is key.

Again, investment risk is art as well as science – you can get a sense of the scale or nature using models and data, and that can be very helpful, but ultimately, it’s just part of the mosaic of understanding what investment risk you are taking; its not a panacea. There are multiple inputs to investment risk: know which ones you are good at, which ones you are less good at and construct portfolios accordingly!