A person should understand the risk profile they have before entering the world of investment, so that they will be able to choose various types of investment instruments that suit their profile and also the potential for loss. Apart from that, the risk profile will also make it easier for someone to diversify their investments. So basically the risk profile can be used as an indicator or guide to find out the level of investment risk you can accept or tolerate when allocating funds.
What are the factors that influence the investment risk profile?
- Thread starter Suba
- Start date
Risks cannot be avoided they're part of investments journey and since you recommend the risks profile it will be better for an investor to familiarise the risks and find the right tools for investment protection like diversifying your investment.
Understanding your investment appetite is important before you make any investment. In any case, don't put all eggs in one basket. You should have a diversified portfolio. Review it from time to time and make adjustments when necessary.
