If Investing were a Ski Run
Written by Mark Salter
We’re at a time in the year when many people and their families are looking forward to spending some time in the mountains enjoying the snow. For me, being at the top of the mountain and skiing all the way down is something that I always look forward to. Thinking about my ski trip in February made me realise how making decisions at the top of the mountain are so closely linked to what I do every day, helping clients build financial plans and investment portfolios that manage risk but also ensure they live their best life.
Picture this: you’re at the top of a mountain, the sun’s dipping low, and you need to catch the last lift of the day. Four routes lie ahead, each with its own thrills and spills—just like the choices you make when investing.
Black Run – Risk, All Speed
Fancy the adrenaline rush? The black run is pure equities—fast, exciting, and with the highest potential returns. But here’s the catch: one wrong move (a market crash) and you’re tumbling down, missing that lift, and paying for an expensive taxi back to the chalet. Great for those who love risk and have time to recover, but not for everyone.
Red Run – A Balanced Adventure
The red run is a mix of equities, property, and bonds. Still a good pace, but with fewer heart-stopping moments. You’ll almost certainly make the lift, even if you hit a few bumps. Perfect for those who want growth but prefer a smoother ride.
Blue Run – Playing It Safe
Blue runs are gentler, like portfolios with more bonds and cash and fewer equities. You’ll glide down calmly, avoiding big falls, but you’ll take longer to get there. Ideal for cautious investors or anyone nearing retirement who values stability over speed.
Green Run – Safety Above All
Green runs are the slow lane—mostly bonds and cash. Falling is unlikely, but you might not reach the lift in time (returns may not beat inflation). Great for those who want certainty but remember: too much safety can mean missing out.
And Then There’s Parachuting Off the Mountain…
Speculative investing—think crypto or betting on a single company—is like jumping off the peak with a parachute and zero training. You might land at the bottom in record time… or crash spectacularly and wipe yourself out. Fun for thrill-seekers, but most of us should steer clear.
The Takeaway?
Risk and return go hand in hand. The steeper the slope, the faster the ride—but the bigger the chance of a fall. Choose your run based on your goals, time frame, and appetite for adventure. After all, the aim is to make it to the lift—not end up stranded in the snow.