February 26, 2017

Potential Return vs Potential Risk

For an investment, return is always proportional to the risk. The higher the profit is, the higher the risk it could incur. However, with careful study and detailed analysis, you could minimize the risk you are facing when deciding to invest into an opportunity.

From Securities Commission Malaysia, the list below shows the type of investment you can involve in legally to obtain earning from the fund invested. The lower is the position of the item in the list, the higher potential you can earn a great profit, however, it also comes with higher risk.

1. Saving account
2. Fixed deposit
3. Money market
4. Government bonds
5. Corporate bonds
6. Bond unit trust
7. REIT
8. Balanced unit trust
9. Real estate
10. Dividend shares
11. Equity unit trust
12. Foreign currencies
13. Shares
14. Future and options

The return and risk of each investment is affected by many internal and external factors. Hence, you can never predict precisely the outcome of certain investment, especially for high risk investment.

Happy investing!

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