Should all investors accept the assumption that risk is actually equal to volatility?

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Volatility and risk aren’t the same thing.

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@analyst lol more of measure of risk than a type, but I digress

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This assumption is not unreasonable but too narrow to apply to all the investments.

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Yes that is the only way to quantify risk I believe.

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What about credit rating?

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They are correlated. But not the same

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Volatility diminishes with theta.

Theta increases other risks such as credit risk and default risk.

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Returns can decline without volatility- theoretically

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I created a diagram which I use to illustrate how investing works.
I draw a large triangle on a paper. One side I lable safe, one side I lable liquid, and one side I lable high return. Then I tell the prospect/client that they can place their portfolio anywhere in the triangle they want to, being mindful of where it lands relative to each attribute.

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Investors have to quantify where they personally become uncomfortable with loss. Could be percentage and could be dollar figure. Until they experience it I don’t think they really know.

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Market Volatility is one of the components of risk - not the sole component.

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