A reader couldn't understand why I had given a recent tip on Law Debenture Corporation (LWDB) a ‘high’ risk rating.
"I have always viewed mainstream longstanding investment trusts as much lower risk than direct investments in equities," he said. "[And] for 39 of the past 42 years the dividend has increased. The risk compared with a Carillion [situation] must surely be substantially lower. I thought by switching from direct equities into a broad range of investment trusts I was de-risking."
Just because an investment is a collective fund doesn't mean it is low or medium risk. The only low-risk investment is cash, or maybe UK or US government bonds.