As far as I know (because I’ve never used one), advisers will do things like recommend certain investments based on your risk appetite.

It will likely be linked to your age and circumstances, and regardless of what appetite level you’re at – they will still recommend shares, bonds, and funds.

Which doesn’t sound much like diversification to me.

For my own investments I like those that are:

– Asset backed

– BojoTruxit Proof (amended slightly to make room for our new Prime Minister here in the UK)

– Ideally both of the above.

What I care less about is whether they are liquid or not.

You may or may not be aware of this, but regulators will often determine an investment to be high risk purely because it is illiquid and doesn’t have the Financial Services Compensation Scheme protection.

So an Exchange Traded Fund (ETF) is quite possibly deemed as low risk, because your money is protected in case the company you invested through goes bust, and you can sell more or less whenever you want.


Point one about FSCS cover doesn’t protect your capital in all instances, and if you want to sell you may have to do so at a loss (so your capital is not protected).


If you went for that high risk, illiquid option – which just so happened to have really strong security in the form of a first charge over a residential property with a low loan to value ratio, your capital plus interest lands in your bank account at some point in the future.

if you didn’t need to access that capital in the meantime, maybe over two or three years, then how is that high risk?

Long story short, don’t assume the regulator’s definition of high risk is the same as yours.

Those who can follow my logic here (benefitting from my pretty good knowledge of investment security through my role on the board and credit risk committee of a peer-to-peer lender, plus my role on the board of a property developer) are well suited to becoming Guerrilla Investors subscribers.

No further BoJo references here, I promise:

All the best,

Stephen Wallis

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