Does your portfolio take on too much risk?

Single risk measures have limited value; consider your personal circumstances.

Michael Keaveney 28 January, 2015 | 6:00PM

Note: This article is part of Morningstar's January 2015 RRSP Check-up special report.

Headlines about oil prices, interest rate surprises, housing and big daily ups and downs in the Canadian stock market make it a good time to think about investment risk. Actually, it's always a good time to think about investment risk and how much of it we are taking in our portfolios. Are we taking too much risk? Is it even possible that one can take too little risk?

If you check the prospectus of your fund company, you'll find a long list of potential risks outlined in cold, technical language: Company risk, credit risk, commodity risk, currency risk, interest rate risk, inflation risk, liquidity risk and a host of others. If you don't invest via a fund company, don't kid yourself: You are likely exposed to some of the same risks in your own investments.

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Michael Keaveney

Michael Keaveney  Michael Keaveney, CFA, is Director, Investment Management at Morningstar Associates, Inc.

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