Investment Management – How Do You Measure Risks?

As a financial planner, one of our lead roles with investment management is to evaluate and manage risks with our client's investment. This article shows various types of investment risks that you need to pay attention to when evaluating whether to invest. You can find about best investment management software via

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When investing, you need to consider all these aspects. You cannot avoid risk, but if you understand it, you will have a better chance to achieve your financial planning goals. We measure the risk through a combination of complete test, and quantification using statistical analysis. If you are not an experienced investor, you can ignore this area, which can mean that you take more risks than expected. Or, you might want to reduce the risk and be ultra-cautious, which can mean that you don't achieve the return you want.

Liquidity Risk

This is the risk that you will not be able to buy or sell assets because of their nature or market. An example of investment can be a property. The property market can be a good long-term stable investment; However, when the market experiences depression which means that if you have made some property investment, you might have to take a lower selling value if you need to sell at this time.

Income and capital risk

This is the risk that income is not enough to meet your income needs, or that your capital obligations may be higher than invested capital. Examples with income can be if you retire on permanent income and inflation or interest rates arrange an increase in your income. With regard to capital, you have a risk that your investment is not in accordance with your obligations (say by paying the mortgage is only interest).