Attitude to Risk
Do you know what your attitude to risk is? It is important that you have some understanding so that you invest your money in a way that suits your financial circumstances and that you are comfortable with. A high risk stock market investment that might bring great returns is no good to you if you cannot sleep at night worrying that you might lose it all!
The following is not intended as a substitute for full independent financial advice. It is just a starting point if you are new to the subject. For further information, click here for our enquiry form.
Type 1. Broadly speaking, you are very cautious when investing your money. You probably have little experience of investing and feel happier knowing exactly what your returns will be, even if they are minimal. Your circumstances mean that you may need instant access to your cash with no penalties.
Type 2. You are still cautious but you might consider a little risk to get a higher return than a deposit account. It is unlikely that you will lose your money but you will not make very much either.
Type 3. You are more comfortable with a calculated risk. You are prepared to take a longer term approach. You cannot afford to risk too much money so you are probably better off mixing high risk investments with some safer projects.
Type 4. You have some previous experience with stock market investments and understand that you might lose money in the short term. Again some diversification in your portfolio to spread the risk.
Type 5. You are probably an experienced and knowledgeable investor. You will have enough money to invest and risk some losses without impacting on your lifestyle. You are comfortable taking big risks because there can be very big returns.