Can investors still trust risk ratings?

The painful memories of 2008 are no longer reflected in 10-year returns – a potentially dangerous omission when assessing fund risk and suitability

Ruth Saldanha 8 August, 2019 | 2:00AM

Danger

Investors have reason to be worried right now. Global trade tensions, oscillating energy prices and mixed messages around interest rates have investors on edge, all while the trauma of the Great Recession lingers in their memories.

Meanwhile, investors looking to tread carefully are stuck with a method of risk calculation that no longer considers the last major stock market drawdown – March 09, 2009. And as a result, the past performance of many funds don’t accurately reflect their risk levels.

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About Author

Ruth Saldanha

Ruth Saldanha  Ruth Saldanha is Senior Editor at Morningstar.ca