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4 Ways to Manage Investment Risk

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    #16
    Investment Risk

    There is a serious problem in the gold mining business these days, and it’s not because of the stagnant spot price. Costs are going up industry-wide, and it is making buying gold stocks much less attractive.

    Gold prices have been in consolidation for about a year and a half, and I feel they should experience an upward breakout later this year. But cash costs per ounce are going up, and I would say that the majority of gold producers are reporting this in their quarterly earnings reports.

    It begs the question: should you buy gold stocks right now? My answer is no. I’d rather see you just buy gold. Why take the investment risk of betting on the spot price of gold, a company’s ability to meet production targets, and the industry-wide trend of higher costs? Right now, it’s not worth it. You might as well just speculate on gold prices, not gold stocks. That’s enough investment risk.

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      #17
      ive never been really diversified, when i was in stocks i was in my company stock only, it served me well. even now i am only allocated into 2 holdings.

      my dad is diversified into 4 companies, has been for over 30 years, never once has he reshuffled his allocation
      retired in 2009 at the age of 39 with less than 300K total net worth

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        #18
        1. Avoid Investment Risk
        You always have the option to avoid investment risk by choosing only safe, guaranteed investments.
        2. Diversify Your Investment Risk
        Managing investment risk through diversification, simply said, is “don’t put all your eggs in one basket.” This is the traditional approach to investing that you’ll see promoted by many financial advisors and popular personal finance magazines and books.
        3. Only Take Calculated Investment Risks
        Warren Buffett is considered one of the greatest investors of our times. He has said, “You do things when the opportunities come along. I've had periods in my life when I've had a bundle of ideas come along, and I've had long dry spells
        4. Insure Against Investment Risk
        The last strategy you can employ to manage investment risk is to insure against it. If you have car insurance, homeowner’s insurance, health insurance, or any other type of insurance, you are already familiar with this approach.

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          #19
          Those are definitely some great tips. Do you suggest incorporating precious metals investments in our portfolio for stability and diversification? What percentage of total retirement investing assets would you put towards gold/silver?

          Jim Cramer still seems to think gold is a great way to go, but it just depends on where. Check out his article on CNBC's website:
          http://goo.gl/qnA7T

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