Investing risk factors

When investing, its important to keep the risks in mind.

There are six major risk factors to consider.

Stock Market risk
Political Risk
Interest rate risk
Currency risk
Business risk
Inflation risk.

Now when considering an investment, ask yourself, which of these risks would I be exposing myself to?

How could I balance or hedge that risk by either modifying the investment or adding others?

Take a U.S. bond for example. It carries the following risks -- interest rate, because it's a bond; and there's some currency, and political risks because it's a United States bond.

Now you could consider a foreign bond, as and addition, or you could weigh out the political and currency risks of that foreign bond as compared with the U.S bond, and decide if it is safer alternative.

Category:

News & Politics

Tags:

• investing
• risk
• factors
• stock
• market
• bonds