How effective is investing in gaining profits?
Posted by admin in Finance Friday, 28 October 2011 16:21 5 Comments
What are the risks that can be encountered in investing and how are they avoided?
Posted by admin in Finance Friday, 28 October 2011 16:21 5 Comments
What are the risks that can be encountered in investing and how are they avoided?
How effective? Depends on how good you are. Risk is always there. The best way is to add your knowledge, research first before buying a stock. If you want to know about investing try http://www.stockpickguide.com
the more the risk the more the returns, but invest for a long term basis and on a calculated risk profile
are you talking stocks, or basically anything.
You can invest in many other things, not just stocks.
If you refer to stocks:
There is a thing called risk management, well known to any serious stock (Futures and Forex) trader.
Thats the beauty of trading. You have full control over the risk.
Now let me get this straight. You can not avoid risk. Trading stocks or anything other you can lose money, so it is risky.
If referring to risk management, that is dealing with limiting your losses. Its simple as that.
As example. For a day trader that means, that he will exit a trade and stop trading for this day, when he hits 1% loss of his trading capital. (that could be as well 2% or 5%, you choose).
Then he has alos a limit for a weekly and a monthly loss.
The key is, get rid of the loser and stop trading if your limit is reached.
Its pretty much exaclty the same, when you decide to enter a casino with 500 Dollars, and nothing else. When you lose this 500 Dollars, you stop gambling, take a drink and go home.
Its all about discipline. Make rules, and stick to them.
It is very effective if you invest wisely. Start with a good basic book in investing – there are many out there.
1) Very effective.
2) There are thousands of risks (Hurricane, Earthquake, Fire…) and most of them can be avoided with insurance.