WHAT ARE THE INVESTMENT RISKS?

Economy Guide, this article, you invest to be encountered while potential investment risks will tell. In our previous articles,  we talked about stocks , bonds and many other important points. After reading these articles, you will have the basic information needed to invest correctly. Now let’s take a closer look at investment risks .

As we have mentioned in many of the articles we have written about the investment, the higher the risk, the more likely the gain will be. This big profit attracts brave investors. However, if the investment instruments do not go as planned, the loss will be as great as the investment instruments with high risk. The investor who does not want to deal with investment risks and thinks that I will earn less but I will win more comfort is more assured with more risk-free tools but prefer much less profit. Another important thing to remember is that there are no investment instruments with zero risk…

RISKS RELATED TO SHARES

Stocks bring profit to their investors with price fluctuations and dividend income. However, it is possible to lose as much as loss and even lose all investment. Factors such as the general economic situation of the country and the economic situation of the company may adversely affect stocks. In order to avoid such risks, stocks taken should be diversified. However, the overall decline in stocks across the country can still cause losses.

MARKET RISKS

Market risk is not reset even if the most reliable investment instruments are used. Even if the possibility of market collapse or fall, it always finds its place in investment risks. Negative markets may be caused by social, economic, political and global events. However, if you want to make money, you must return your money in the markets and take this investment risk.

INACCESS RISK

Many investors who want to keep their money away from the markets and investment risks will actually lose even though they think they have won. Pending bank accounts with interest rates that are insufficient for inflation will prevent the possibility of making more money in the market.

CREDIT RISK

This investment risk, which is usually related to bonds and bills, arises from the inability of companies to pay interest and principal on time. Companies may fail to pay their debts or go bankrupt. For these reasons, credit risk should be evaluated carefully. 

EXCHANGE RISK

Although this risk is expected in international markets, it can occur in almost every market. Undesirable fluctuations in exchange rates may be caused by wars, terrorism or regional political negativity. 

INTEREST RISK

Interest risk, another investment risk, is especially important for investors who invest in bonds. The increase in bond interest rates decreases the value of the bond. Fluctuations in interest rates also have serious effects on bonds and stocks. Generally, the longer the maturity of the bond, the higher the interest rate risk. As we said before, increasing investment risk often increases the amount of earnings. Therefore, interest rates paid to investors in long-term bonds are higher.

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