Mercer | A Broader Perspective on Risk

A broader perspective on risk is necessary to help investors navigate an uncertain future.

A Broader Perspective on Risk

Ignorance isn’t bliss … the risks your portfolio may be ignoring

Today’s highly quantitative risk management industry is the product of the simultaneous advances in computing power and finance theory we have seen since the 1960s. Exponential increases in computation speeds have allowed academics and practitioners to create a wide range of mathematical models able to process vast amounts of historical data and develop numerous projections of the future. Although they are undoubtedly helpful when used appropriately, the resulting tools (now ubiquitous across the industry) have led to an over-reliance on numerical estimates of risk. The language of risk is dominated by the terms “volatility” and “value at risk,” creating an unintended blind spot in relation to risks or trends that are inherently difficult to measure or quantify. 

The following quote from Lord Kelvin (inscribed on the wall of the social sciences building at the University of Chicago) could quite easily be the slogan of today’s risk management industry: 

“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind.” 

 Request a copy
Please enter your details below, and we will send you a PDF
*Obligatoriske felt
Fornavn er obligatorisk
Etternavn er obligatorisk
Stilling er obligatorisk
Email er obligatorisk Email ugjyldig
Bedriftsnavn er obligatorisk
Land er obligatorisk

I would like to receive communications about products and offerings from Mercer. I understand that I can unsubscribe at any time. 

By clicking Submit, I agree to the use of my personal information according to the Mercer Privacy Statement. I understand that my personal information may be transferred for processing outside my country of residence, where standards of data protection may be different.

En feil har oppstått. Vennligst se over alle feltene i skjemaet. .