Many years ago when I started investing, I was terrified of risk. Tales of the Great Depression and people jumping out of buildings during the stock market crash of 1929 floated in my mind.
Fast-forward several decades. After investing many dollars, I have learned how to understand and manage risk in investing.
Sensible investing in the financial markets is important to grow your money for the future. You need to earn the type of returns that will allow you to spread out earnings over a long life. That is difficult to do until you identify the parameters of risk and understand your individual risk tolerance.
Types of Investment Risk
You cannot avoid risk, but you can learn how to invest so that you will minimize risk while maximizing returns. There are three principal types of investment risk:continue reading »