Saturday, 2 July 2011

Six methods to reduce your investment risk (Part 8 of 8)


The essential principles of risk reduction will not provide you absolute protection, but they can help you keep your losses to a minimum. Whatever your strategy, check facts for yourself and never trust anybody blindly.

Times of economic adversity are often the best to rebuild an investment portfolio. As Lao-Tzu observed twenty-six centuries ago: "Truth is often paradoxical. Don't make the mistake of believing that you know what you don't know."

Making risk reduction a part of your financial plan can help preserve your peace of mind as much as your savings.

[Text: http://johnvespasian.blogspot.com]

[Image by FreeCat under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]

Six methods to reduce your investment risk
(Part 8 of 8)


The essential principles of risk reduction will not provide you absolute protection, but they can help you keep your losses to a minimum. Whatever your strategy, check facts for yourself and never trust anybody blindly.

Times of economic adversity are often the best to rebuild an investment portfolio. As Lao-Tzu observed twenty-six centuries ago: "Truth is often paradoxical. Don't make the mistake of believing that you know what you don't know."

Making risk reduction a part of your financial plan can help preserve your peace of mind as much as your savings.

[Text: http://johnvespasian.blogspot.com]

[Image by FreeCat under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]

Six methods to reduce your investment risk (Part 7 of 8)


[6] Save regularly, monthly if possible, in order to ensure that you will also invest during periods of pessimism.

Psychologically, it is easier to place your money in the stock market when prices are rising than when the world seems to be falling apart. Nevertheless, periods of economic misfortune tend to be the best to purchase assets at a low price.

This last principle is the most difficult to apply, since it requires enormous self-discipline. If we overreact to painful past experiences, we will overlook great investment opportunities.

When the stock markets of the world go through a difficult period, the low prices can offer excellent possibilities for the future. If you adopt the habit of investing regularly, you will be able to make profitable decisions when few are willing to take any risk.

To be continued in the next post.

[Text: http://johnvespasian.blogspot.com]

[Image by Linda Duchaine under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]

Six methods to reduce your investment risk
(Part 7 of 8)


[6] Save regularly, monthly if possible, in order to ensure that you will also invest during periods of pessimism.

Psychologically, it is easier to place your money in the stock market when prices are rising than when the world seems to be falling apart. Nevertheless, periods of economic misfortune tend to be the best to purchase assets at a low price.

This last principle is the most difficult to apply, since it requires enormous self-discipline. If we overreact to painful past experiences, we will overlook great investment opportunities.

When the stock markets of the world go through a difficult period, the low prices can offer excellent possibilities for the future. If you adopt the habit of investing regularly, you will be able to make profitable decisions when few are willing to take any risk.

To be continued in the next post.

[Text: http://johnvespasian.blogspot.com]

[Image by Linda Duchaine under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]