Risks And The Rewards
react differently as market
risk may result in greater reward but sometimes it leads to no reward
of Various Asset Classes Over 37 Years.
time, changes in market conditions occur which effect the performance
of the various classes of assets. Over the 37 year period between
1958 and 1995, the asset classes depicted in the above chart remained
profitable and performed far above the rate of inflation despite experiencing
brief periods of decline.
eliminate risk entirely, but you can evaluate it and manage it by thinking
long term, diversifying, using professional money managers and keeping
a level head.
may sound odd, but a no-risk investment strategy is one of the riskiest
financial approaches you can
take. Inflation (loss of purchasing power) and taxation continually eat
at your capital and returns, which is the biggest risk to fixed term investments
such as GICs.
Investment risk and potential higher
returns often go hand in hand, however market volatility can also be associated
with risk. For instance, if your investment is prone to fluctuation and
you need to sell when the price is down, you could lose some of your capital.
Even though mutual funds may share
similar underlying securities to stocks and bonds, they are associated
with different levels of risk and potential return ratios. Each individual
investment has its own unique risk/reward factor that you should be aware
of before making any investment decisions.
the following questions:
- Do you
have the time or resources to gain enough knowledge to become
a stock or investment picker?
- Do you have
the confidence to choose investments that are suited to your risk tolerance?
At Fiscal Agents, we can help you
with any of the above matters with our professional money management services.
We have the expertise to take the worry out of investing.
- Do you have
the experience to build a plan that moves you towards your investment
When we design a Cornerstone personal investment plan for you, we'll try
to help you build a portfolio that maximizes market potential and is consistent
with your comfort level of risk.
To get a better idea of the two-way effect of risk and return on investments,
take a look at the charts on the right.