Nearly every investment instrument in the world has some level of risk associated with it – some are less risky than others like mutual funds, while some instruments like derivatives carry very high-risk elements – which make them only suitable for experienced investors or speculators.
One cannot simply make an investment without considering the risk factors involved in it. The level of risk can be different for each financial market or instruments and can be mitigated by taking appropriate steps.
New as well as some of the experienced investors in Nigeria often make the mistake of ignoring the risk factors associated with the concerned financial instrument.
It is essential to identify each risk element and make a sound financial plan before you start investing to achieve the financial objective efficiently. Potential investors should also acknowledge the asset allocation, risk tolerance, time horizon before making a financial plan and making any investment…
Source: Vanguard Newspaper
