Letter to My Daughters: On Investment Risk
Most conversations about investing start with the question, “How much risk can you handle?” which I think is a very good question. But few people take the time to define the term “risk,” and so they wind up making assumptions that may or may not be true. There are all kinds of risks in life, and there are different risks associated with investing money, but I’m going to focus on just three of them: The chances of losing my money, How much and how often the price of a security goes up and down, The probability of losing purchasing power [...]