From the course: Managing Your Personal Investments

Unlock the full course today

Join today to access over 22,600 courses taught by industry experts or purchase this course individually.

Managing risk

Managing risk

From the course: Managing Your Personal Investments

Start my 1-month free trial

Managing risk

“

- Investing is risky. There's always a chance that your investments will lose value. You may buy stock in a mining company, hit by a lower commodity prices, or maybe a retail company overburdened itself with debt and can't pay its obligations. Or maybe an older company gets crushed by innovative competitors, but there's also a chance that your investment will increase in value and that's why people invest. The risk to your investments can come from countless sources but the end result is the same, loss of value. If you want to avoid risk, there's actually something called the risk-free rate of return. For investors, this is the 10-year US treasury note. The government of the US guarantees payment and has never defaulted so this is the benchmark for no risk investment, but it is also one of the lowest returns available. Right now it returns a fraction of a percent a year. Your return is guaranteed, but your return is…

Contents