What is risk?
We have realized that our role as a financial advisor is really to manage risk. The first thing we must establish with this responsibility is to define “risk”. Textbooks have told us over the years that you should measure risk in terms of volatility using standard deviations. As a mathematician, this should be easy. Next, we studied investment theory which introduced us into the world of Alpha and Beta. Sure, this makes great insomnia-curing reading but after doing this for many years we had to ask ourselves, “is this what is important to our clients”?