Brian Parker, investment strategist at MLC Investment Management which manages about $55 billion, says the $2.3-billion trading loss suffered by UBS AG has many “observers shaking their heads.”

“Surely financial services firms would have been on guard?” says Parker. “It does highlight risk management. Shouldn’t risk management be at least as important as return-seeking investments?”

Investors, Parker says, are more affected by losses than profits.

“Investors feel the pain of losses more than the joy of strong returns,” he says. “You need to imagine what may go wrong.”

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