Everyone has their own perception of what risk iseople often have risk onhave done the right thing.jections, asked your advisor to From an investment planningtheir mind. However, theUnfortunately, the reality ischange the assumption on infla-perspective, if you plan for yourDollarsPactual risk that is of concernthat there are lots of differenttion to 6 per cent.assets to last until your mid-eight-may be different from one personrisks.&During the 1980s, inflation was ies and then live 10 years longer,to another.Avoiding investment risk bymuch higher than six per cent and there is a strong chance you willSenseOne recent comment madeinvesting in just guaranteedretirees who had lower paying run out of money.By Peter Watsonpublicly by an individual was thatinvestments, would uncoverfixed income investments or fixed You have likely heard the pop-his children did not want him toanother risk.pensions suffered significantly.ular expression, If I had knowntake much risk with his invest-The new risk is being forced toThere are many different risks how long I was going to live, Iextremely low prevailing interest ments.spend all of your money because of that you as an investor face and would have taken better care of rates.An easy answer is to avoidthe risk of inflation.you have to monitor these care-myself. Some people worry about the investing in stocks.If your guaranteed investmentsfully. Doing so requires you to be This is true of your investmentsrisk of high inflation. Stocks go up and down inpay you a very low return, then atfamiliar with the various types of too.The Bank of Canada worries value. some point you may not haverisk.The solution is to balance yourabout inflation too. There is no guarantee whatenough money.As it turns out the greatest risk risks in a similar fashion as youIt has hinted that it would they will be worth from year toIf your investment returns dothat many will have is a risk that would, hopefully, balance yourincrease interest rates in year. Therefore, stocks are risky.not allow you to keep up with thefew worry about.investments.September and usually its moti-Avoid investing in stocks anddiminishing purchasing power of It is the risk of living too long.Consider all of your risks. Thenvation behind higher interest have your entire portfolio ina dollar, then unless you startedThe average life expectancy for make sure your written planrates is to slow down an over-bonds. with a tremendously large portfo-those who have already reached addresses these various risks.heated economy that could result At the end of the term, youlio, you will run out of money.the age of 60 is 81 for men and 85 Submitted by Peter Watson,in inflation.know the value of the bond andIt takes considerable wealth tofor women. MBA, CFP, R.F.P., CIM, FCSI. InCanada has an eight decade his-what you will be paid.be able to avoid any investmentBut if you live longer than 90 1991, Peter founded Peter Watsontory of inflation, averaging around In simple terms, that wouldrisk. per cent of your age group, you Investments in Oakville. Peter canthree per cent. satisfy this individuals childrensMost people have to take somewill live to age 91 and 96.be reached at 905-842-2100 orThe next time you are prepar-request that he avoid risk.investment risk because they needThese figures are from Statistics visit the website at www.peterwat-ing your retirement cash flow pro-By their definition he wouldreturns that are higher than theCanada.soninvestments.com.Disabled? Handicapped? Sick? 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