What is investment risk?
The Hindu
Risk must be defined based on investment objective, not on the possibility of negative returns in future
How do you define investment risk? We ask this question because many individuals are worried that equity investments currently carry high risk, having recorded continual uptrend in recent times. In this article, we show that risk must be defined based on your investment objective, not on the possibility of negative returns experience in the future. You invest to achieve a goal. This could range from buying a house within the next five years to investing for your retirement 25 years hence. Risk in this context is not about earning negative returns.
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