Do you need risk?

01:21 Mins Read

Is risk really essential for an investor? Watch this video to find out.

Transcript

Holding your investment capital in cash might protect you from investment risk. But you won’t be able to generate any returns for wealth creation. That’s why it is essential to invest in different assets. And risk is something that’s inherent to the very act of investing. This makes risk an essential factor for return generation. Therefore, you need to have an element of risk in your investment portfolio. That said, taking on too much risk in a bid to create wealth is also not a good idea. When embracing risk, it is essential to always use various strategies like diversification and hedging. They can help manage risk and keep it in check, while also ensuring that you get to fulfill your financial goals. Also, when taking on risk by investing in an asset, it is a good idea to read through the relevant risk warnings and disclosures. Unsure about the importance of risk warnings? Head on to the next chapter in the module to know more about them.

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