Risks of Investing



Defining Risk
Risk is not simply the possibility of a loss in your investment; it is much more than that. Investment risk can be defined as the possibility that the return on the investment won’t be achieved. Expanded further, this would mean that not only would there be no income return, but there may also be no capital return, or even a capital loss. Many factors contribute to the decrease in the value of an investment and these factors need to be taken into account from time to time.


About Investment Risk
If you have a weak heart or if you are not prepared to accept any risk at all, then investment may not be the wealth creation option you should take. If you want to invest, then you must be prepared to take a risk. The amount or extent of the risk will depend on the investment you finally select.

Some risks you could experience include the following:

  • You could make a loss on your investment when you cash it in, leaving you with a smaller amount of capital than you started off with.

  • You could lose because inflation affected...

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