Spread Your Investment to minimize Risk

 

Investing Easy teaches you how to invest profitably and safely. It shows you strategies the pros use to increase profits and protect you from loss.
Investing Easy

Spread Your Investment to minimize Risk

Author: Mary Janell

When it comes to investing cash in stocks and shares ISAs, you are also placing your hard-earned capital at an increased risk. The risk inherent in this type of investment has a tendency to fluctuate in value, so you might end up having less than the amount of your original investment.Is it possible then, to reduce that risk and protect your investment? Yes, you can do that by spreading your investments over several markets and providers.

In the event you invest all your hard-earned funds in one place, you would merely be inviting higher risks that may result in larger losses.Let’s suppose the fund manager constitutes a poor investment selection, or even the fund management company is confronted with bankruptcy and has to close down; you wouldn’t want all of your capital to stay in that sole fund.
A great way to reduce risk is to start small, then steadily increasing your portfolio over time, as you are also gradually securing your financial future. Don’t hit out immediately; start with safer investments and, when you are more assured, you can go into the riskier investment choices.Maybe beginning with a cash ISA would be a wise decision, then move onto stocks & shares ISAs later on. Whenever you move on to stocks & shares ISAs, you might like to begin with the less risky alternatives, such as a FTSE tracker fund or even a UK equity earnings fund.

You need to be mindful of your financial goals and investment objectives before delving into funds which possess a higher risk. You could choose a UK corporate bond fund, as with these your money is invested in the debt of big blue-chip companies. Alternatively, there are UK growth funds which look at small sized British businesses or companies that have the potential to develop rapidly in the future. Slightly riskier would be to move into a fund that invests in overseas corporations either in Europe or the USA.

To spread the risk, a good idea would be to invest in a portfolio of funds, a good example of this can be found on the following link;
https://www.rplan.co.uk/modelportfoliobuy/selectfunds#SelectFunds

If you wish to invest in a higher risk path, you could think about a UK revenue fund, then look at different funds that put money into high yield ties in business property, products or emerging marketplaces, which often also hold more risk. 


Regardless of your financial predicament, you must look at spreading risk and getting into more assorted investments and property classes such as shares, ties, cash and products. A well-balanced money investment portfolio is less liable to risks and as a consequence more prone to gain a higher revenue in the long run.

Article Source: http://www.articlesbase.com/investing-articles/spread-your-investment-to-minimize-risk-5889017.html

About the Author

Mary Janell has been managing her own assets for the past 8 years and is keen to share her experience and knowledge on investments with others.

This entry was posted in Economics and tagged , , , . Bookmark the permalink.

20 Responses to Spread Your Investment to minimize Risk

  1. Angry American says:

    I bought shares in Lloyds at 50 p and RBS at 41 p, and both have dropped to way below this but recently have been going up, I was planning on selling both when they make 12% profit for me, is this a good strategy? And also is it important to have a plan with all companies you buy then follow through with it? e.g. only selling at 12% increase?

  2. ashishs says:

    Is earning 9% annual interest rate in bank FD better than to buying a property?

  3. ashishs says:

    Is earning 9% annual interest rate in bank FD better than to buying a property?

  4. Angry American says:

    I am 13 and have decided I want to invest my money.
    I only have $50 so not that much but what can i invest in?

  5. Angry American says:

    She has a living world deluxe habit cage size large. its pretty big and includes a hideaway. will this be good enough for a pregnant bunny to nest? otherwise i was thinking of investing in a hutch. or maybe a playpen? any ideas is helpful.
    She has her own cage. the father has his own too. by the way, it was an accidental pregnancy. after her litter, im getting them both fixed

  6. Angry American says:

    I am from Canada, there are not Tesco stores here. The closest thing is Fresh and Easy in the U.S. which I have been couple times. Do you think their market share domination in the UK is stable? What about in other countries like Thailand, Korea and Czech Republic?

  7. Nilu6686 says:

    Hi, Is it a good time to invest in gold? current price is 31924 rupees. how much rise one can expect end of the year in gold price?

  8. gowthamg says:

    but there is no returns Nav is 10.80, so i change to any other fund kindly advice

  9. bajranglals says:

    I thinh you have opted growth fund,due volatility in share market the profit is not visible in value.you cal1.surrender policy,and invest in assured return policy like bima bachat,jeewan tarang.
    2.switch your growth fund to balance or income fund to reduce your share exposure risk.

Leave a Reply

Your email address will not be published. Required fields are marked *