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One of the key risks retirees face is a significant loss in the value of their retirement capital. This is usually as a result of poor investment returns during times of increased market stress, which manifests in higher levels of volatility and may include significant market corrections. In many instances, this is exacerbated through too high drawdown rates. This is an important topic, but one for another day.
"The fund aims to provide investors with income and capital growth by investing in a range of liquid assets including local real estate investment trusts (REITS), property loan stocks, property collective investment schemes and property developers."
The prevailing economic and market environment has motivated people to embrace cash as an investment alternative. What we are seeing is that individuals are making emotional decisions as a direct response to the adverse environmental challenges, and they often make costly errors in judgement due to their lack of understanding and/or the absence of concrete, reliable information.
The biggest risk which investors face is themselves, because the mistakes they commonly make are based on their own behaviour and personal biases, warns Morgan Housel, a partner at Collaborative Fund in the US and a former columnist for the Wall Street Journal.
The strongest deterrent against FSP compliance missteps is or should be: