What are the risks in going with the flow?

What are the risks in going with the flow?

Orbis Investments

Swimming against the tide can be painful, but there are long-term risks associated with investing in what everyone else thinks is a good idea.

Bank of America Merrill Lynch recently published a survey of global fund managers which found that, on average, respondents were expressing a preference for assets traditionally considered “safe”.

While that may sound like a solid plan at the moment, this piece from Orbis Investments notes that “the real risk with any investment is paying a higher price than it is worth and seeing your capital permanently impaired.”

Is it really a good idea to trade future return potential for near-term comfort?

If you read this, you will learn:

    • what it means to invest with a “contrarian” approach
    • why a company doing well in recent times doesn’t necessarily spell future success
    • a case study of two well-known stocks
