Emotional investing magnifies volatility

The bottom line is that we may have to get used to high levels of volatility for a while yet. But as my colleague Nader Naeimi has said "volatility is an unexpected deviation in the path to an investor's destination (ie, the investment goal) which can lead to both risks and opportunities. Risk is the probability of not reaching the destination (ie, failing to achieve the goal)". In other words there is much more to risk for investors than volatility. There are several points to note when thinking about volatility and the risk of not meeting your investment goals.

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