Village 360

Investments

What's the best home for my money and how much can I afford? What do I want to save for and when? How much financial risk am I prepared to take and do I know how much risk I am already exposed to?

Risk vs Reward vs Expectation

The saying "There's no such thing as a free lunch" is seldom wrong and the world of investing bears no exception to this rule.

The level of financial risk that you are prepared to take with you money depends on several factors namely:

1. Time horizon - When will you be needing the money?
2. Net wealth - Can you afford to take a risk with this money?
3. Personal risk attitude - Are you prepared to take a gamble with your investment or are you a cautious person?
4. Personal circumstances

It is also important that the level of risk you are prepared to take with your investment is quantified, i.e. what can you realistically hope to achieve from this investment over the term concerned. Past disappointments typically have not just been a direct result of poor performance. An investors expectation needs to be clearly identified and moderated if necessary.