deal structure

Vertical maturity in investments

by Edward Robertson [revised 24 April 2017]

It is axiomatic that investors will demand higher return on investment in exchange for accepting a higher degree of risk. In the blog post “Redefining risk…”, I drew a distinction between that axiom and the reflexive, unthinking attitude that high returns themselves necessarily signify high risk. I also rejected the traditional idea of risk as volatility. Risk is the uncertainty associated with planned goals and objectives. My hypothesis is that uncertainty is reduced by what we could call vertical maturity in the investment.

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