Bay of Plenty Times
  • Bay of Plenty Times home
  • Latest news
  • Business
  • Opinion
  • Lifestyle
  • Property
  • Sport
  • Video
  • Death notices
  • Classifieds

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • On The Up
  • Business
  • Opinion
  • Lifestyle
  • Property
    • All Property
    • Residential property listings
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
  • Sport

Locations

  • Coromandel & Hauraki
  • Katikati
  • Tauranga
  • Mount Maunganui
  • Pāpāmoa
  • Te Puke
  • Whakatāne
  • Rotorua

Media

  • Video
  • Photo galleries
  • Today's Paper - E-Editions
  • Photo sales
  • Classifieds

Weather

  • Thames
  • Tauranga
  • Whakatāne
  • Rotorua

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In

Advertisement
Advertise with NZME.
Home / Bay of Plenty Times / Business

Liz Koh: Don't panic - we live in volatile times

By Liz Koh
NZME. regionals·
15 Jul, 2015 05:00 PM2 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save
    Share this article
The impact of the financial crisis in Greece has been felt in the stockmarket.

The impact of the financial crisis in Greece has been felt in the stockmarket.

The impact of the turmoil in Greece on sharemarkets is a classic example of how the emotions of fear and greed create volatility.

When shares start to drop in value, investors can become fearful of sustaining further losses. This leads to panic selling, which further fuels the fear.

Eventually, a turning point is reached when less risk-averse investors spot the potential for gain. Increased buying activity pushes prices up, and fear is diminished.

The outcome of this process is that risk-averse investors suffer losses while gains go to those who are less risk-averse.

Significant events can have a ripple effect on markets, just like a pebble being thrown into water.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

High levels of uncertainty create high volatility and, as the outcome becomes clearer, the uncertainty and volatility gradually decrease.

Volatility is a test of true levels of risk-aversion.

It is easy to be a confident investor with a high exposure to growth assets when volatility is low and returns are high.

Advertisement
Advertise with NZME.

Falling prices reveal attitudes to risk. They also reveal insecurities formed from previous episodes of volatility.

Memories of events such as the Global Financial Crisis can create irrational fear.

Diversification is one of the principal tools for reducing risk. The risk of investing in a portfolio with an adequate level of diversification is not a risk of loss but a time risk -- that is, how long the investor has to remain invested in order for value to be restored and for the investor to be rewarded with a rate of return over the investment period which reflects the degree of risk taken. Volatility is a reminder that investment in growth assets is a long-term game.

If long-term goals and strategies have not altered, short-term volatility should be of little concern.

Discover more

Liz Koh: First home buyers may do better in regions

16 Jun 05:00 PM

Liz Koh: Trapped between old folks, grown kids

25 Jun 05:00 PM

Liz Koh: Wise up to using an important service

30 Jun 05:00 PM

Liz Koh: Travelling retirees pension tallying

08 Jul 05:00 PM

* Liz Koh is an authorised financial adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free. Call 0800 273 847. For free e-books see moneymax.co.nz and moneymaxcoach.com.

Save
    Share this article

Latest from Business

Premium
Business

New Zealand's top 10 busiest house builders - how they cope with downturn

Premium
Bay of Plenty Times

Opinion: The pros and cons of paying down your mortgage faster

Bay of Plenty Times

A couple bought a house in a holiday hotspot. The woman living there refused to leave


Sponsored

Revealed: The night driving ‘red flag’

Advertisement
Advertise with NZME.

Latest from Business

Premium
Premium
New Zealand's top 10 busiest house builders - how they cope with downturn
Business

New Zealand's top 10 busiest house builders - how they cope with downturn

Numbers are down but thousands of new homes are being built by the leaders in the sector.

06 Aug 10:00 PM
Premium
Premium
Opinion: The pros and cons of paying down your mortgage faster
Bay of Plenty Times

Opinion: The pros and cons of paying down your mortgage faster

03 Aug 04:00 PM
A couple bought a house in a holiday hotspot. The woman living there refused to leave
Bay of Plenty Times

A couple bought a house in a holiday hotspot. The woman living there refused to leave

03 Aug 01:51 AM


Revealed: The night driving ‘red flag’
Sponsored

Revealed: The night driving ‘red flag’

04 Aug 11:37 PM
NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • Bay of Plenty Times e-edition
  • Manage your print subscription
  • Manage your digital subscription
  • Subscribe to Herald Premium
  • Subscribe to the Bay of Plenty Times
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • Bay of Plenty Times
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP