What has investment risk and Maslow’s hammer got to do with investing?
04th October, 2021
Famous American psychologist, Abraham Maslow, coined the phrase “If all you have is a hammer, everything looks like a nail” to explain when cognitive bias leads us to become over-reliant on a familiar tool. But what does that have to do with investing and how we view risk?
Relying on familiarity can mean not seeking alternatives, and when we consider this in relation to how we measure investment risk, distilling risk to a single number is volatility. To view risk as volatility and short-term loss can result in a fairly narrow view of the investment landscape.
Watch the video to see Gary Connolly, Head of Investment Advisory, Davy, explain why perspective and how understanding that risk is broader than volatility and short-term capital loss is key to the investment decisions you make.
Warning: This video recording is classified as a marketing communication in accordance with MiFID II Regulations, the European Union (Markets in Financial Instruments) Regulations 2017, and is neither investment advice nor an investment recommendation. It does not take into account the investment objectives, knowledge and experience or financial situation of any particular person and is not an invitation to invest.
You should seek advice in the context of your own personal circumstances prior to making any financial or investment decision from your adviser. Davy manages discretionary portfolios in accordance with agreed investment mandates and Advisory clients receive investment advice specific to their circumstances directly from their advisers. Should clients wish to contact their advisers at any time, they should do so in the usual way.