The Price Of Equity Risks

Don't Try To Call The Peak Of The Market-If You Do, You Might Miss Out On Some Good Months

- Schalk Louw

I’ve referred to the term “danger pay” on previous occasions as a concept that especially soldiers are quite familiar with. Danger pay is that extra payment in exchange for their willingness to, amongst other things, do service in extremely dangerous areas. This type of payment may sound very attractive, but it’s of crucial importance that soldiers remain aware of the possibly huge price attached to danger pay. They have to be willing to sacrifice their own lives for a few thousand rand extra a month.

In the investment world, we are also familiar with danger pay, or risk premium, and although it won’t necessarily claim your life, it’s definitely something that you should be aware of at all times, especially when compiling your own personal share portfolio.