Financial planning firm in Perth simplifies risk and return to take the confusion out of risk management.
Everybody goes into investing with one goal: to make money. Some are very successful and some aren’t. It is important to know that all investments carry inherent risk. Just because you invest doesn’t mean you are going to make money. It is important to have the right professional advice and be fully informed of the risk factor when making any investment.
Generally, the higher the risk, the higher the reward. Here are four basic strategies that can help you lower investment risk.
Long Term Investments
A long term investment such as property may fluctuate in the short term, but they usually even out over time and eventually produce good returns if you stay in long enough. We aren’t saying that it isn’t OK to sell shares if they are peaking and represent a profit, but we are saying that we have seen a lot of people lose money in short term, high-risk investments.
Stay in Your Comfort Zone
If you have a low tolerance for risk, you probably shouldn’t make risky investments. Find your tolerance for risk and then stay within it. Some can afford to lose a lot of money; some are devastated with even minor losses. It is important to know which side of the fence you are on.
One of the best ways to mitigate risk is to diversify across several markets and platforms. This keeps you from losing it all if one segment of the economy goes bad.
Do Your Homework
We always recommend using a professional financial planner, but you should never blindly trust anyone with your money. Educate yourself about investing.
The information here is general in nature because we realise that everyone’s financial information is different. It is important to talk to a professional financial planner when investing in your future. To talk to the professionals at Purely Finance, call 1300 745 778.