Why risk and return go hand in glove - Mary Holm

Monday 26 April 2004

Q. I am considering investing with a finance company, but I keep getting told that the higher the interest rate, the higher the risk.

Everyone I ask says, "Yes, that's true", but no one can really tell me why that is true.

It is a bit like believing that the sun comes up in the east - which is not true, if you think about it.

It seems to me that the su

By The Landlord

ccess or failure of any business is entirely dependent on the quality of the people running the business.

I keep reading about many apparently substantial companies losing their investors' money, so what to do?

I would appreciate your comments on why the term "the higher the interest rate, the higher the risk" seems to be perceived as always being true.

A. First, let's look at your statement about business success depending on the quality of the people.

It's true that every move a company makes is made by people. But some highly intelligent and honourable people have made what turned out to be terrible business decisions. There's got to be an element of luck in there.

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