{"id":588,"date":"2010-08-01T02:36:48","date_gmt":"2010-08-01T09:36:48","guid":{"rendered":"https:\/\/maysfinancial.local\/"},"modified":"2017-02-26T02:02:02","modified_gmt":"2017-02-26T02:02:02","slug":"investment-risk","status":"publish","type":"post","link":"https:\/\/maysfinancial.local\/articles\/investment-risk\/","title":{"rendered":"Importance of Understanding Risk When Investing"},"content":{"rendered":"<p>Accepting risk is acknowledging the <strong>possibility of losing some or all of the investment principal.\u00a0 High risk<\/strong> typically means <strong>high volatility.<\/strong> When something is high in volatility, it is <strong>unpredictably irresolute.<\/strong> Both <strong>timing and degree of fluctuation are difficult to anticipate.<\/strong> When something is low in volatility its movements are predictable with a high degree of certainty, it is <strong>low risk.<\/strong><\/p>\n<p><strong>Risk is not independent and should not be considered in a vacuum.<\/strong> Risk generally correlates positively with return. This means that <strong>as risk increases, so do potential returns.<\/strong> Unlike other risks we accept, there is no such thing as investment insurance to protect against bad investments.<\/p>\n<p>When considering risk you must <strong>weigh the possible gains vs. the possible losses.<\/strong> The degree of risk that someone is willing to accept depends on a number of factors. One is simply <strong><span style=\"text-decoration: underline;\">personal preference<\/span>.<\/strong> <a title=\"What is your risk tolerance?\" href=\"https:\/\/maysfinancial.local\/investing\/what-is-your-risk-tolerance-learn-before-investing\/\">How much risk can be comfortably tolerated?<\/a> A second is <span style=\"text-decoration: underline;\"><strong>investment goal<\/strong><\/span>: Growth? Capital preservation? Income? A third is <span style=\"text-decoration: underline;\"><strong>time horizon<\/strong><\/span>: how much time is there until the funds are required? High risk investments tend to do well over the long-term because <strong>time has a way of taming risk.<\/strong> Low risk investments do well in the short-term because they are more predictable and sometimes more liquid. <strong>There are many factors in determining acceptable risk; most of them tend to overlap.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Accepting risk is acknowledging the possibility of losing some or all of the investment principal.\u00a0 High risk typically means high volatility. When something is high in volatility, it is unpredictably irresolute. Both timing and degree of fluctuation are difficult to anticipate. When something is low in volatility its movements are predictable with a high degree [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3991,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[2,9],"tags":[149],"_links":{"self":[{"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/posts\/588"}],"collection":[{"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/comments?post=588"}],"version-history":[{"count":0,"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/posts\/588\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/maysfinancial.local\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/media?parent=588"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/categories?post=588"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/tags?post=588"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}