Morningstar's Kaplan cites why investors consistently underestimate equity risk

Groups' vice president of quantitative research explains to Asset.tv's Mark Colegate why investors consistently underestimate equity risk

For Dr Paul Kaplan of Morningstar, the downside potential of equities is much higher than conventional risk models allow. In conversation with Asset.tv’s Mark Colegate, Kaplan, who is vice president of quantitative research at the group, explains why investors consistently underestimate equity risk and how maths developed more than 40 years ago can help change the way we understand markets. What has your work at Morningstar consisted of? I have done a lot of work in developing our style analysis, our star ratings – which a lot of mutual fund investors are familiar with – the way we r...