What Risks Should I Be Aware Of When Investing?
Filed Under: Sensible Investing
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Q. Hi Josie, my question Is about Investing and in particular the different types of risks when it comes to investing?
Josie’s Answer -There are lots of things that can affect the performance of your investment. These include business risk and market risk.
Business risk is where we might be disappointed by a company’s investment results which can be caused by inefficient management, competitors beating them at their game, changes to the industry etc. It makes sense to diversify a portfolio across different company’s shares and share markets (
Market Risk is what we are seeing today. The market as a whole is suffering due to broader economic factors, investor sentiment etc. This type of risk cannot be diversified away by holding a greater variety of securities.
It may, however be reduced by increasing the time horizon of the investment, which basically means, you have to hang in there for the long term.
I hope that answer’s your question….I have however found a few more articles about “Investment Risk” for you to check out from around the web:
Wealth Creation Strategies: Part 2 - Investment Risk and Return
Top 39 Essential Rules of Investing
Forming an Investment Risk Objective
Investment Risk Explained
What is Your Investment Risk Strategy?
Don’t forget that the above information is general in nature and not specific to your goals and objectives. It is recommended that you seek personal financial advice specific to your needs.
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