047: Biblical Investing—Understanding Risk

Entering into the investing world with a healthy, realistic view of the various  risks is vital to a successful experience. Without some risk, there is no respectable growth.

If you search online for the word risk, you’ll find:

–verb. “to expose to the chance of loss.” 

So, why take any risk at all?

For the investor there is an expected reward for the risk taken—the growth of an investment.

 

In This Episode, We Look At:

Some risks can be eliminated, some mitigated, and others can be taken on with confidence

Liquidity Risk (not having access to your money) – can be eliminated

Inflation Risk – can be mitigated

Single Company Risk – can be eliminated through diversification

Capital Risk – can be mitigated through:

Proper Diversification

Owning many asset classes that are dissimilar

Including fixed income in the portfolio to decrease market volatility

Volatility – Prices and values tending to fluctuate sharply and regularly

 

One Thing You Can Do Today to Improve Your Faith and Finances:

Remember that the investor anticipates a reward for the risk taken (over a long period of disciplined investing) and several risk factors can be eliminated or mitigated in your portfolio. Seek advice from a licensed, Registered Investment Advisor Representative before investing.

 

What Are Your Thoughts?

If you have a question or comment about today's topic, we invite you to share your thoughts.