I was asked by The Times newspaper for my fund tips for medium risk investors. Below is an expanded version of my comments, available exclusively to 80-20 Investors.
A medium-risk approach is suitable for those investors who understand and are comfortable with investment risk, and that they might not get back the capital they invested. But they are prepared to accept this in exchange for the possibility of greater potential investment returns. What that means in reality is that the sort of funds they will likely invest in would have a 5% chance of losing 8% in a given month.
If we are looking for sectors that are good hunting grounds for medium risk investors then developed world equities is a good place to start.
Research has shown that over the long term, equities outperform lower risk assets such as cash and bonds.
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