Visit https://Royalty7.com/ref=dolphin001252/ for more info

1. Most investment strategies pitch somewhere upon the
continuum between a high risk / high return approach on
the one end and a low risk / low return approach on the
other. The problem with pursuing high investment
returns, is that the capital value of investments may
decrease in the short term before they increase again. The
problem with conservative low-return investments is that
the real value of capital may over time decrease due to
inflation.

2. The art of investing lies in finding the approach that suits
you personally best. One should on the one hand try to
maximise the return on capital, but at a risk level that is
acceptable to you. The question is what is regarded as
acceptable risk and, is the acceptability a constant factor
that stays the same under any circumstances? The answer
is no. More risk is acceptable under certain
circumstances, but before these circumstances are
discussed, it is necessary to discuss the following terms
that will be used, that are often confused:

3. Saving

4. Saving is the action of putting money aside. It means that
money is not spend, but is kept at the owners disposal.

5. Investing

6. Investing means that money is handed over to a third
party for purchasing assets with the purpose of long term
investment growth. Investors transfer the their funds with
the intention that financial assets like shares and bonds or
hard assets like diamonds are bought. Investing does not
mean to hand money over to dubious schemes.

7. Gambling

8. To gamble is normally understood as "to play a game for
money or other stakes" like putting money on a roulette
wheel or buying a lotto ticket. It can also mean to buy a
share that you know nothing about or investing in a
scheme you don't understand.

9. Marketers of illegal schemes use the word "investing" to
lure people to hand their money over to them.
Initially, when "investors" receive high payouts, they think
the scheme is the best investment thinkable. The fact that
it has nothing to do with investment, only dawns on them
when they lost all their money and it is to late to recover
anything.

10. Speculation

11. Speculation means that a calculated risk are taken to make
money on a relatively short term. One may for instance
buy property with the purpose to sell it in a year or two at
a higher price. The price of the property may not rise, but
at least you have done sufficient homework to make sure
that there is a high probability that it will rise.

12. Now that we are sure about the terms, we can look at the
circumstances under which a higher risk may be
appropriate.

13. Surplus income: The higher your surplus income, the
higher the risk you should be able to handle in investing
money.

14. Frequency of investment To invest a certain amount
regularly, holds less risk than to invest a single amount at
once.

15. Amount: If the amount you want to invest, is a small
percentage of your total capital, you can accept greater
risk.

16. Term: Greater risk can be handled with longer investment
terms. Young people can therefore accept greater risk, but
if the term of their financial objectives is
shorter, investment portfolios should be structured less
risky.

17. Income: If you receive an income from your investment, it
should be structured more conservative with less risk. If
you are not receiving an income at the moment, but plan
to do so in future, you can decide to pursue a higher
return till you need the income. When this happens, the
investment could be restructured to reflect the new
situation.

18. Investment experience: Investors with little investment
experience should be more wary against risk than
investors with lots of experience in this regard.

19. Dependants: Investors with more dependents should be
more wary towards risk than those with few dependants.

20. Health: Healthy investors can handle more risk than
unhealthy investors.

21. Diversification: An investor that already has a well
diversified investment portfolio, can accept greater risk
with new investments than investors with undiversified
portfolios.

22. Timing: Share investments are normally more risky than
some other investments. Investment risk can however be
reduced if shares are bought when the economic cycle is
on it's lowest. Risk can also be lowered if investors buy
shares of strong well established companies with little
debt and healthy balance sheets.

23. Emotional tolerance:Some people loves the adrenaline
rush in going for high returns, with no regard to the risk.
They are emotionally capable of doing it this way. For
other, it is a nightmare if their investment fall by a single
percentage point. One should therefore know how you
will respond to sudden capital depreciation.

24. Summary

25. One's view on risk forms an extremely important element
in investment planning. It is as irresponsible to take
unnecessary risks as it is to be satisfied with a low return
on your money. However, to pursue higher return, goes
with the responsibility to research the investment
opportunity thoroughly before parting with your money.

26. https://Royalty7.com/ref=dolphin001252/