As risk evaluation becomes more deeply entrenched in wealth management, advisors face critical questions about economics and psychology.
The study of risk in financial services has been a “modern” concept for decades, and it has grown to encompass dozens of risk-related elements. When it comes to understanding and measuring risk specifically within wealth management, things have really heated up only in the past 10 years.
In the classic investing book A Random Walk Down Wall Street, renowned Princeton economist and professor emeritus Burton Malkiel wrote that “both within academia and on the Street, there has long been a scramble to exploit risk to earn greater returns.”
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