Understanding Risk: How to Assess and Manage Investment Risk
Introduction:
Define investment risk and its various dimensions, such as market risk, credit risk, and inflation risk.
Assessing Risk Tolerance:
Explain different methods for assessing risk tolerance, including risk tolerance questionnaires and personal risk assessment.
Discuss the factors that influence risk tolerance, such as time horizon, financial goals, and psychological factors.
Managing Risk:
Provide strategies for managing investment risk, such as diversification, asset allocation, and hedging techniques.
Highlight the importance of staying informed about market developments and maintaining a long-term perspective.
Risk Management Tools:
Discuss risk management tools and resources available to investors, such as stop-loss orders, options contracts, and risk management software.
