Understanding Risk
It makes sense to think about your age and risk as afunction of your financial goals. If you take too much risk in retirement you could lose your nest egg and if you arenot working, you have little alternative to attempt to make a living. The longer you have to make your money back using stocks or bonds, the more risk you can take.
Market Risks
The most common type of risk investors will assume is market risk. Market risk is the risk associated with a change in the price of the asset. Prices can change for a number of reasons such as a change in monetary policy from a country's central bank or new information regarding the health ofthe economy.
Prices can also change when sentiment changes, as investors look to either take advantage of a higher moving market or exit has they believe an adverse move is underway.
Comments