Understanding the different risks in investment planning Warwick Free State Regional Manager, Wiann Van Zyl discusses some of the investment risks clients should be aware of and how Warwick attempts to mitigate these. (Picture of Wiann Van Zyl, Warwick Free State Regional Manager here please) As 2023 lies excitedly before us, it is once again a good opportunity for clients to review their investment portfolios and understand the different types of risks that their hard-earned savings are exposed to and the investment fundamentals Warwick utilises to navigate through them on behalf of our valued clients. Types of investment risks Inflation risk Inflation risk, also known as purchasing power risk because the ability to purchase various goods and services is dependent on the changing levels of prices in an economy. The risk is that the investment will lose purchasing power over time. Interest rate risk The values of all financial assets are, to some extent, dependent on the interest rates in the economy. When changes in interest rates are unexpected, the changes in asset values are said to arise from interest rate risk. Market risk Market risk, also known as volatility, is the day-to-day fluctuations in an asset’s price. Business risk […]
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