Investment Risk

When we think of investing our hard earned money into the equity market, the first thing that surface in our mind is the word “risk”. It is predominantly perceived as negative or something to be avoided or a threat that we hope will not materialized. Risk is inevitable and it is a fundamental part of life. It exists in our daily dealings with the most common decisions. Making the choice to marry the right partner itself is a risk. Your risk is higher if you were to invest large sum of money in a new start-up company. Risk exists because we are uncertain of the outcome of a particular decision or course of action. There is always a certain degree of risks in any decision we make concerning our life, career, purchasing the ideal house, and of course investment choices. In investing, risk is coherently linked to the performance of the business. Instead of avoiding risk, it is important that we understand the risk involved. Be equipped with the necessary financial education is a must before going into investing.  We would be foolhardy to ignore its existence, especially when it comes to investing.

How much risk you can handle depend on your financial knowledge, risk appetite, time available to monitor your investment and your financial goal. If you have no time to monitor your investment portfolio, the risk of losing money is higher, as you are exposed to a volatile financial market. Any major world crisis and economic downturn influence the movement of market. Change in the business structure, strategy of  business operation and management team may affect the market sentiment. As such, to be a successful investor, you need to be very disciplined and focus in your financial goal and investment strategy. To hone your investment skills in the equity market, you need to invest in yourself through education and learn from the experts by attending seminars and workshop diligently. Most of these workshops are affordable and some are free. You may also Google and search for  information pertaining to investment.  Ultimately, you need to take action and start investing. It is of no good use if you do not put what you learn to practice.

There is no short cut to becoming a successful investor. However, you can shorten your learning curve by attending relevant courses that incorporate mentoring and sharing in their program. Bear in mind that such courses are pretty pricey and you may want to think carefully before you sign up. It only makes sense if you use the knowledge which you acquired during the course to help you invest wisely with calculated risk.

If you are like me who dislike reading chart and financial statements, investing in equity, Forex and commodity is not a wise choice. Perhaps you may want to consider investing in property, land and some other alternative investments. Whatever you invest, remember that there is risk involved. Consider carefully and ensure that you set aside sufficient fund for living expenses for you and your family. Only invest your spare cash and stay prudent. Never allow greed to cause you to invest beyond what you can afford to risk. The bible said: “For the love of money is a root of all kinds of evil……” (1 Timonthy 6:10) and “He who is greedy for gain troubles his own house,…..”(Proverbs 15:27)

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