Investment Risks

Investment Risks
Investment Risks — Make Friends With Risk and it can Become an Opportunity


Make Friends With Risk and it can Become an Opportunity

Many people consider risk only in negative terms—something to avoid at all costs. But when you invest, risk is not only unavoidable, it’s actually necessary. It relates directly to your potential to not only lose money, but to make it too. The key is finding the right balance between the level of risk you can accept and potential reward.

When you invest, risk is not only unavoidable - it’s actually necessary.

In this section, you’ll learn the difference between market, inflation, credit and opportunity risk. You’ll see that some risks are tied to specific investment types, like credit risk with bonds and market risk with stocks. We’ll explain how you can use economic indicators to see if the economy is ready to run a marathon or running out of breath. You’ll come away with a general sense of how you feel about risk—your risk tolerance—and how those feelings can change depending on your age, your goals and your personality.

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Once you understand how risk works, you’ll feel empowered to manage it and use it to your advantage. This information should help you keep your anxiety about risk down and your potential return up.