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Joseph Stone Capital on ways to reduce your investment losses
Growing your wealth over time is frequently a priority for maximum investors, but inflation means that cash loses value rather quickly. This is why it is important to invest your money where it can develop in value and add to your future financial wealth.
Investing is a way to allow your hard-earned money does some of the hard work for you. This sounds great but in reality, investing comes with a degree of risk, and investors must decide whether the tradeoff between the level of risk and potential return, is worth it. If the thought of possibly losing the capital you put into your investment scares you, don’t boycott all your investment ideas just yet. The good news is, that there is plenty of ways to reduce the level of risk you take on when investing according to Joseph Stone Capital.
- Establishing some clear personal and financial objectives will make it simpler to decide on which assets to invest in. If you are trying to save for a holiday within the next year, you may be better off investing in something low risky, so that you are not out of pocket when you need the money. Setting goals will also help you to find out your risk appetite. If you do not think you have the scope to manage a loss on your investment, and then take on a low-risk investment, even though it possibly won’t have a high return. Once you become familiar with fluctuations in the market, you may be more ready to take on higher-risk investments that also have higher returns!
- Investing in assets and industries including bonds, shares, savings accounts, term deposits, and both residential and commercial property means you are not too heavily exposed to a single market. Spreading your investments across various asset classes means a fall in value in one investment would not lead to your financial undoing, as you have other investments to fall back on that may have increased in value with a similar economic event.
- According to Joseph Stone Capital people usually do a lot of research prior to making their investment decision to help maximize the return they get from the risk they take on. It is essential to continue monitoring your investment so that all this hard work is not wasted! If you just ‘invest and forget’ you may miss warning signs about your investment going down, or miss the opportunity to make a profit when the market is strong.
- Establishing some clear personal and financial objectives will make it simpler for you to decide on which assets to invest in. If you are trying to save for a holiday within the next year, you may be better off investing in something low risky, so that you are not out of pocket when you need the money. If you are thinking longer term and offering yourself 30 odd years to put a plug of cash into your retirement savings, then you can probably go for a higher risk investment that will generate a higher return – as if the investment abruptly drops in value you have more time to wait for its value to increase again.
Thus, when it comes to investing, there is a lot to consider. Do not let the risk of losing, stop you from playing the game – as big wins can also be made. Getting some expert advice from a financial adviser or broker will ease your concerns – and always keep in mind to think.