The Most Common Investment Risks

BUSINESS

The Most Common

LegacyFX Introduction

INVESTMENT RISKS

THE MOST COMMON INVESTMENT RISKS

LOSING MONEY ON AN INVESTMENT IS THE MOST COMMON KIND OF INVESTMENT RISK.

For many investors, having some modestly risky investments in their portfolio is a good way to increase the likelihood of attaining their goals.

Investors may choose to put their

For many investors, having some

money into a ‘safe’ instrument, such

modestly risky investments in their

as US Treasury bonds and bills, but

portfolio is a good way to increase

the price of this safety is a very low

the likelihood of attaining their goals.

return on investment.

Not Reaching Investment Goals

Age and Risk Age is often linked to the amount of risk an investor is prepared to take.

For individuals that have committed

For example, a younger investor may

to an investment goal, not achie-

be willing to take more substantial

ving this target is another common

risks, as they believe they have plen-

investment risk.

ty of time to recoup any losses.

In general, most lower risk invest-

However, an older investor – who

ment opportunities come with a

may be only a few years from reti-

lower rate of likely return. Increasing

rement – may not want to risk the

the value of the investment and the

capital they have built up to serve as

length of time it’s in place can be a

their pension.

way to mitigate this.

To learn about the reward risk ratio, visit the blog of LegacyFX.