What Are Investment Risks ?
Investment means you are buying shares in a company, or investing in bonds and securities offered by a company or a firm. You are investing a portion of your money for some types of higher returns. If the company performs well, then they will be sharing their profits with you in return of your investments. |
Also, when the company is doing well you have an option of selling your shares at a higher price than what you purchased them for.One person can own as many shares in as many different companies they choose. However, every type of investment is a risk. You would not know how the industry or the company could perform after you invest your money in them. It may be more or less.
Taking risks in investments is something you should be prepared to do while buying shares. There are several online tools like portfolio manager software that help you keep a track of your investments. They also indicate the level of risk you are taking by holding on to a certain share. For example, people invested in a software firm’s shares believing that it was the best performing markets a few years back. It was true as the information technology industry was doing very well. However, just before the recession, the IT industry dynamics changed, and several companies started shutting down. This caused the share prices of software firms to fall steeply. Even big companies like Microsoft and IBM suffered. Such things are bound to happen in the share markets and the biggest risk you will be taking is loss of profits and money.
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