If you are a newbie in the world of investment, your first thought would likely be either of the two outcomes – lucrative profit or extreme loss.
While it’s true that all investments come with a risk, there are steps you can take to minimise the chances of loss in your investments.
Your risk appetite will be one of the fundamental factors that decide what type of investor you are or will become. Your risk profile will help you determine the breakdown of assets in your portfolio – also known as asset allocation.
The oldest trick in the book to minimising risk is portfolio diversification. As many investors will tell you, “don’t put all your eggs in one basket”, which means to avoid concentrating your funds into one type of investment and instead, flow your funds into different assets.
However, if you are new, the best way to dip your toe in investment is by investing in unit trusts.
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