Managing Your Risks - Investment Workshop
We noticed you didn't make the workshop but no worries, we've got you covered with notes from the session.
The Relationship Between Risk and Reward
In general, the more risk you're willing to take on, the higher your potential returns, as well as potential losses. This proposition is probably familiar and makes sense to most of us. It is simply a fact of life — no sensible person would make a higher-risk, rather than lower-risk, investment without the prospect of receiving a higher return. That is the tradeoff. Your goal is to maximize returns without taking on an inappropriate level or type of risk.
Understanding Your Own Tolerance For Risk
The concept of risk tolerance is twofold. First, it refers to your personal desire to assume risk and your comfort level with doing so. This assumes that risk is relative to your own personality and feelings about taking chances. Second, your risk tolerance is affected by your financial ability to cope with the possibility of loss, which is influenced by your age, stage in life, how soon you'll need the money, your investment objectives, and your financial goals.
Evaluating Risk: Where to Find Information About Investments
You should become fully informed about an investment product before making a decision. There are numerous sources of information. In addition to the information available from the company offering an investment — for example, the prospectus of a mutual fund — you can find information in third-party business and financial publications and websites, as well as annual and other periodic financial reports. The Securities and Exchange Commission (SEC) also can supply information.
Start developing your risk management strategy today. Schedule a complimentary appointment with your CFS* financial consultant.
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The credit union has contracted with CFS to make non-deposit investment products and services available to credit union members.