One factor that always needs to be carefully considered when investing money is the concept of risk.
Market risk refers to the possibility that the value of your investment will go down because of changes in the broader economy that you cannot control. Examples of these changes include stock prices, interest rates, currency exchange rates, commodity prices and many other factors.
How Does This Affect Me?
Many people don’t realize that the success or failure of their financial plans might be tied to market risk. For example, many Americans use 401k accounts to save for their retirements. 401k accounts are often used to purchase stocks and other securities. Because stocks can lose value based on the market conditions we listed above, that means these 401k accounts are subject to market risk. It’s important that you go into investments understanding that you could lose some or all of your money in any one investment.
What Can I Do About It?
In many cases, the investments or strategies that offer higher rewards also have higher market risk. It’s important to balance possible reward with possible risk when making plans for the future.
If you are very concerned about market risk, there are solutions available that can help you plan for your financial future while gaining protection from some of the downsides of market risk. This is where a financial professional can help more than a webpage.
Please note: The material on this website is intended for informational purposes only. Neither Tranont Life nor its affiliate companies authorize its agents, employees or representatives to give securities advice. Please consult the appropriate professional for advice about your situation.
This information is not intended to be specific advice to purchase, sell, liquidate, surrender, replace or withdraw from a particular mutual fund, variable insurance product, stock, bond or any other security.
Tranont Life, its affiliates, and its representatives are not responsible for any damages or losses from use of this information.