The Money Guide: Investment (part 2)
What type of investor are you?
Without taking on calculated risks, your investment rewards may be inadequate
Risk and reward are opposite sides of the same coin, and it is almost certain there will be a trade-off between the two to achieve your long-term investment goals. Investment guru Warren Buffett is quoted as saying that “risk comes from not knowing what you’re doing”. Take this billionaire’s advice and understand the risk of the various types of investments before leaping in – and, importantly, know your own risk profile and whether you are risk friendly or risk averse regarding your investments. For the average person, risk means the temporary or permanent loss or decrease of your investment value. But without taking on calculated risks, your rewards from investing make be inadequate, so make risk your friend. A good financial adviser can help establish the optimal level of investment risk that will let you achieve your investment goals, taking into account your risk profile. Legislation requires that an adviser obtain all the necessary information to establish your needs and objec...