Money Monday on The Bridge: High Risk Investments and the Type of Investor You Are
I was fortunate enough to chat to media personalities, Lerato Kganyago and Dineo ranaka, on their radio show titled The Bridge on South Africas leading radio station, Metro FM. The topic at hand was “high risk investments” and below is a summary of the 10 minute conversation:
High risk investments are more aggressive & volatile but generally reap higher returns. 3 simple examples of this would be: hedge funds, IPOs & trading forex. When determining your risk appetite, we look at 3 things:
1) Risk assessment will determine your risk appetite, you can go get a risk assessment from any financial advisor.
2) Time: how long would you like to invest the money for? (If you need the money within the first two years then you’d need to invest in something thats of a lower risk. If you’re disciplined & can keep the money invested for a longer period of time, then higher risk could work. Time allows you to recuperate your losses)
3) Experience: allows you to have a fair understanding of how the markets fluctuate & how investments work.
Ensure that your investment has reached a profit/ breaks even before selling it. Try to avoid pulling out of investments too quickly.
- Don’t forget the golden rule: “Don’t invest with money that you cant afford to lose”!!!
- Attached is an example of different types of investments based on your risk appetite.
For any trading and investing related questions, please send them to my team firstname.lastname@example.org or email@example.com