... only 5.69% per annum after inflation over the 10 year period since 1996, as opposed to high-risk share investments, yielding 12.01% per annum over the same time period. More significantly though, is the influence of the time factor on people's decisions to accept a greater risk, as investors 'can take more risk if [they are] investing for a longer period'. The volatility of the market, especially in the short term, can be seen by asset prices fluctuating from 'negative figures to double-digit returns' about every five years. However, in the long term, the general economic cycles of booms and recessions will ensure an eventual upward trend in market prices. Having to tolerate the risk of short-term capital losses for an eventual positive return, is acceptable for many investors interested in long term gains. Understanding the concepts of risk management is also another reason behind many people's decisions to invest their funds ...

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