Monday, 3 December 2007

adversity to risk and your age

Having chatted to a lot of financial advisors I now know I have very little fear for risk. Investment is all about balancing the relationship between fear and greed. How greedy can you get, how much money dare you risk before fear takes a hold. The longer you can hold out the more you stand to win but also lose. Simple logic, but finding out just how much or little you fear losing isn't a simple as it first seems.

It all depends on what you can afford to lose and just as importnatly in my opinion, your age. Risk is much easier to take on if you are at the beginning of your investment 'career' as such because it means you have longer to recoup the potential losses and most probably have less riding on the fallout.

I invested in a trio of funds three years ago and went for s S&%^ or bust approach by throwing myself into asian markets and the highest risk of those funds. What happened? I could have lost it all but because I was prepared to 'gamble' it all I more than doubled my money.

I'm about to reinvest that money now and because I'm still at an early stage in this career I want to do the same again before thinking about diversifying into some safer investment vehicles.

The plan is to keep everyone up to date with what happens but any thoughts and opinions would be most welcome...

1 comment:

David Cushman said...

isn't risk about what you have riding on your personal equity?
I'm probably more risk averse with a wife and child than I would be without?
By the way - great to see you blogging.
If you need further inspiration, try here: