Assets: Manage Risks
When managing assets, there is always risk associated with each class of asset type. Banks offer low risk insured earned interest on bank deposits, while stocks offer a potential higher appreciation rate with a higher risk. Risk increases as the uncertainty of appreciation, or volatility, increases.
Starting Steps for Managing Investment Risks Goals
(1) Study the volatility ranges that frequently occur on investment types over time; daily, weekly, yearly, or longer.
(2) Decide how long you can be without some assets and when those assets are needed.
(3) Decide which investment type volatility fits your timeline for your invested assets.