Than risk a private investor

Posted on Nov 8, 2000 08:15:27 AM

Any instrument of investment – whether it be a bank deposit or a stake in the second tier – involves some risk. Especially when you want to have an income higher than the bank. But the risks can and should be minimized, according to financial adviser Vladimir Savenok. The main thing – do not buy sky-high numbers of return on the results of the last week or month, and to the extent possible to calculate the risks.

There are three main risks to be borne by private investors – the market, the currency risk of the company that they trust their money.

Market – is a risk that at some point in time the value of investments may change not only in b’olshuyu, but in the smaller side. For example, you can invest your money in the bank, which guarantees you 10% per annum. And you can – in an investment fund that is able to earn for you and 30% annually, but nothing is guaranteed, and it does not exclude losses.

The only possibility to insure against this risk – diversification of the portfolio. Or, as the famous saying goes, do not put your eggs in one basket.

For those who are most important – to keep the savings will approach the following structure of the portfolio: 60% of funds invested in conservative and low risk assets, such as a bond or deposit in the bank. 30% – moderately risky, such as mutual funds mixed investments. And the remaining 10% – in high-risk instruments – stocks, mutual funds shares, etc.

Investors aged 20-25 can not afford to increase the share of risky assets, since they have more time to correct their mistakes, says a consultant. “But if you are already over 50, you should conversely reduce the share of risky assets, or to exclude it from the portfolio”, – says Vladimir Savenok.

Currency risk – the risk that changes in exchange rates and the impact of this change in the value of assets. Recipe for protection from adverse dynamics is the same as in the case with other instruments – diversification. This does not mean that your forex portfolio should be 15-20 different currencies. According to Mr. Savenok, enough of 4.2 to insure themselves against currency risk.

He recommends the ratio of U.S. dollars, euros and rubles in the proportions 40:30:30. Great lovers of insurance we can recommend and the Japanese yen.

Another risk – the risk of the company. And here Vladimir Savenok states: the main criterion in choosing a partner should only be reliable. Neither yield nor liquidity can not be the first place. Therefore, choosing a company, you have to evaluate reliability of a number of indicators. We present the main.

a company, an asset rating, money, risk, tools, vladimir,

1. Private Wealth Management
2. Dictionary investor in the securities market
3. Results for risk
4. Results for the investor profits
5. Results for market risk

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