Follow these rules and you will deal the investment risk better.
- The greater return you want, the more risk you'll usually
have to accept
- The more risk you take with your investments, the greater
the chance of losing some or all of your initial investment (your capital)
- If you're saving over the short-term it's wise not to take
much capital risk. So what you are investing for and when you'll need access to
your money will have a big impact on what types of investments are right for
you
- If you are investing for the long-term you can afford to
take more risk as your money has more time to recover from falls in the markets
- Investing in share-based assets has historically proved to
be the best way for providing growth that outstrips inflation. There is a risk
attached but, when you invest over the long-term, there is more time to recover
your losses after a fall in the stock market.
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