Remember that there is no such thing as a risk-free investment. A sensible investor will understand that there is no shortcut or guarantee of gains. In any kind of investment, the level of return is always associated with the level of risk.
While it is impossible to avoid risk entirely when investing, you can take measures to manage the exposure that you do have, and gain confidence that the financial decisions you are taking are suitable for your own circumstances.
Before committing to any investment, it is important that you clearly understand what your own risk levels should be, and the possible downside of that product. Ask yourself what your investment objectives, time horizon and future financial resources are, before committing.
Re-examine the risk and return profile of your investments from time to time to ensure that they continue to suit your expectations. This is especially important as your life circumstances will develop in any number of ways from planning to have a family to changing job.
In this section, you will find information about the various types of investment risks you need to be aware of, and the different characteristics of your investments such as stocks, bonds, funds and properties.
You will also be introduced to some useful investment techniques to identify and avoid risks, such as balancing your portfolio, diversification, knowing when to cut your losses and how to avoid excessive leverage. Some of the scenarios in this section may help you reflect on your own investment attitude.