How much risk will you accept on your investment journey?
Understanding risk is central to investing. At MKC Invest, we take a structured approach to risk, recognising that the level of risk taken should reflect each client’s objectives, time horizon and ability to withstand changes in value over time.
Expert wealth management
How much risk will you accept on your investment journey?
Understanding risk is central to investing. At MKC Invest, we take a structured approach to risk, recognising that the level of risk taken should reflect each client’s objectives, time horizon and ability to withstand changes in value over time.
Expert wealth management
“Risk and return are connected, understanding both is key to investing with confidence.”
Understanding risk
Investing involves taking risks with your money. It is important to understand the level of risk involved and why that level of risk is appropriate for your investment objectives.
Risk reflects the degree of uncertainty you may experience during your investment journey.
In general, there is a relationship between risk and potential returns. Investments with higher levels of risk may offer the potential for higher long-term returns, but they may also experience greater fluctuations in value along the way. Understanding this balance is an important part of setting realistic investment goals.
The illustration below is designed to show the relationship between risk and potential returns across different portfolio benchmarks.
It highlights how higher levels of equity exposure have historically been associated with both higher potential returns and greater fluctuations in value.
Time is also an important factor. The longer you remain invested, the greater the opportunity for investments to recover from market downturns. Cash may appear to be a low-risk option, but it also carries risk. If inflation rises faster than the interest earned on cash savings, the real value of that money may decline over time. Historically, long-term stock market returns have generally exceeded those of cash or cash-equivalent investments.
Before investing, it is important to understand your risk tolerance. This describes the level of fluctuation in the value of your investments that you are both able and willing to accept.
Your risk tolerance may depend on factors such as:
- Your financial objectives and investment time horizon
- Your personal attitude towards risk
- The level of potential loss you are prepared to accept
The MKC Invest difference
Our portfolios are built and managed with clearly defined investment objectives and risk levels.
Each portfolio is constructed using a disciplined and consistent process, with funds selected based on the role they play within the overall strategy rather than in isolation.
Portfolios are monitored on an ongoing basis and adjusted where necessary to ensure they remain aligned with their intended objectives and level of risk.
This structured approach helps ensure that portfolios behave as expected over time, across different market conditions.
Your financial planner will help you:
- Determine whether one or more of our portfolio ranges may be suitable for you
- Understand how much risk you are willing and able to accept
- Identify your MKC Invest risk profile
- Select the portfolio within the range that aligns with your agreed risk level