The time you need to multiply an investment is an important factor that influences your risk profile. It could be that you came into some money at fifty plus years of age and you have a limited time to multiply your money before your retire. If you find yourself in these sort of situations where you don’t urgently need the money immediately, then it is important to take a few calculated risk. Take time to put your money where it will multiply, and where your have some risks involved, but where the returns are there in time. The risk must be calculated, meaning you have done your homework and research well. You must also be able to recover from such situations financially if it does not turn out for the best.
Dangerous investment positions to avoid
Even the best investments carry a measure of risk and there is always the chance that you might lose money. However, these are some situations that you must absolutely avoid to ensure that you are not in a position where you will lose money. By taking these precautions, you can put yourself in a safer position. These are some situations you must teach your children to undoubtedly avoid when it comes to investing or invesments in order to mitigate you risk.
All the eggs in one basket
You have all your investments tied up in one major investment and no diversification. For example, if you have all your money tied up in, let say, one major property investment, you will be in a high risk position. What happens if your investment does not pan out ? Your entire investment portfolio for your future and everything else then fails due to being tied up in this one investment.
There are many who advocated that diversification is a safe policy when it comes to invesments. If one of your eggs in one basket fails, you then still have others to use as back up.