- The right understanding of risk involved is must to access returns.
- Expected returns of investment means long-term average gains.
Investment has various implications including tax returns and enhancing your money. However, it also involves risk factors which usually perceived as losing what is invested.
This is not the only definition of risk when it comes to investment. Failure to meet the return goals also is a risk that matters in investment.
Investment is a caution move and these are the probable reasons why you might have made the wrong investments:
1. Underestimating goals: Making a well planned out financial goal is important to make profitable investment. Inflation, market scenario, price fluctuation are some of the factors that need to be considered before setting up investment goals.
2. Failure to access your returns: While accessing your returns, here are three things that you must consider the amount of investment, actual returns, and for how long the investment has been made. These dynamics has to be understood to calculate whether you made a profit or not.
3. Wrong understanding of risk: Risk is a subjective term that varies from investment to investment. Before making an investment you need to understand the unique condition and not compare returns of the different investments.
4. Wrong understanding of expected returns: Expected return means long-term average returns and not what you gained immediately. In fact, investing for longer period reduces risk and has better chances of gains.
5. The feeling of not being able to save: Investment requires commitment and sometimes there is a fear of not been able to save enough before making an investment. Understand your finances and always invest on what you are willing to take the risk.
Last Updated 31, Mar 2018, 7:02 PM