Every time we invest there will always be a risk involved. There is no such thing as zero risk, even when we go out to work, there is always a possibility that we can get into an accident.
Some people say that investing is like gambling. Actually its not. It's because gambling is wagering something of value with an uncertain outcome. In investing we expect to earn something and the probability of earning is usually higher than the probably of losing.
In order to understand risk, we must first define it.
Risk is the potential of gaining or losing something of value. The higher the risk the higher the should be your expected return. This means that if you want to invest in a business, you should expect for a higher return than if you just invest in the bank. However, sometimes even when the risk is high, the actual return may not be equal to what you expect the return to be. This is because of the different risks in investing.
So what are the risks to consider when investing?
Protect your income as early as now. Talk to a FinancePH advisor so you can come up with a good financial plan - whether retirement, educational planning for your children, estate planning and travel or business planning.
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