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Hi, I'm new to this forum & i want to know about investment risks.
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Welcome to the site.Originally posted by richardbowen View Post
You'll need to be a little more specific in your question. What investment are you referring to? Every type of investment carries different risks. Are you asking about stocks, bonds, mutual funds, real estate, gold, or something else?Steve
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investment risks = you can invest money in anything and you could lose it all.Comment
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^^Pretty much how it works.Originally posted by rennigade View Post
The risk is the amount of loss you can incur on an investment. Unless there is some protection built into whatever you are investing into, it will always be a 100% possible loss.
In some places, if you get a really bad deal, it can turn into negative %. Such as buying a house, fixing it up, then find out it is worth less than you paid for it plus the money you put into it. You take a loss to get rid of it. Happens all the time.Everything happens for a reason. Sometimes that reason is you're stupid and make bad choices.
Current Occupation: Spending every dollar before I dieComment
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Risk is usually synonymous with volatility, and volatility is defined as the variance, or expected standard deviation, in the movement of the asset's price over a select time period. This is equally true when the price movement is going in your favour if you want to be rigorous in your portfolio risk management.
There are A LOT of factors that go into determining an asset's price at any given time and theres a laundry list of risks. I'll briefly mention some risks that can be applied to all asset classes, keep in mind that some asset classes have additional risks.
Interest Rates
Time
Liquidity
Political Stability / Enforcement of contracts &/or property rights
Volatility
You can view these risk factors as applying a premium (or discount, but usually a premium when you view from your side of the transaction) to the asset price.Comment
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Welcome to SA. We're a diverse group with different backgrounds and experiences.
Lots of people see RISK as a four letter word! Nearly all the financial groups have some kind of financial Risk Assessment Questionnaire as they attempt to 'know their client.' We often suggest Vanguard products because of their reasonable cost structure and sensible decision making process.
offered in hopes it will help you better understand investment factors.Comment
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the pondering of any outcome that makes your stomach turn would be considered a risk.
That varies by person.Comment
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