Managing Risk & Shares

Written by: SafeInvesting

Every deal, trade, investment or business must be undertaken on the basis of a strictly applied limited risk approach. That is, you should only be prepared to lose a fixed and limited amount of money on the investment. You have no control over what the market will do; you have no control over the share price. Strangely, however, one of the few factors completely in your control is how much you are prepared to lose.

Each time money is invested in a share, the risk being assumed by that investment action must be identified before the investment is made. Once the risk amount has been identified, the next decision is to decide on the method of risk control which will be employed as part of the investment plan. Saratoga

About The Author

Phil Wengier, VIC, Australia