Faced with such a sign Billy Connolly was confused: he did not know if stingers climbed trees or fell from the sky; but he was ‘being ware’.

What Billy comically pointed out was that he needed to know both the risks and how to mitigate them.

In investment, the risk is to the income stream: there is always a risk in a downswing that the rent received will be lower than expected. The wary investor will adjust the price that they are prepared to pay for this risk, with more risky cash flows discounted at a higher rate than more secure cash flows.

Using empirical data on the drivers of rent in a downswing from the RES Cashflow Consortium, investors can estimate the variations in risk by sector and by quality. Contact Malcolm Frodsham for details.