A lot of investors buy a particular stock with the intention of making a huge profit over a short period of time. However, it is not investing, but gambling. For stock market investment, you are never guaranteed that you will get the high returns over short period of time. If a particular investment can give you high returns, it’s an indication that you need to be high risk taker.
The investor should always determine their risk level of the investment. If the investors are looking for high returns, they should be able to meet high potential losses as well. So, it’s advisable that every investor needs to find their own comfort level with risk and create an investment strategy around that level.
However, if you still young then you can afford higher risk than older ones as you will have more time to recover if bad tragedy happens. They also can have longer term investment when the short term investments did not make any profit. This is because investment markets have some very good years but they also have years that aren’t so good investment return.
There are many types of risk that investors need to think carefully. Currently, I’m more sensitive with market risk which is the one of the risk in which market conditions can negatively impact your investment returns. It is the possibility of your investment decreasing in value over a given time period simply because of economic changes or other happening such as Japan tsunamic, Lybia tense and etc.
