Is Investing Risky?

Have you ever heard of the following?

“Investing is risky. I have come across people who were ‘burnt’ badly in the stock market and now they are afraid to invest again.”

Is investing really risky?

It depends. Perhaps it is better to illustrate using an analogy.

Taking driving for example. If a person, who has not driven before, were to take the wheel for the very first time.  This would be rather risky because there is a high chance that this person may encounter an accident.

However, suppose this same person learns how to drive and finally earns his or her driving certificate. If he or she were to drive now, driving would considerably be less risky because he or she would have probably learned how to drive in a safe manner.

Similarly, when it comes to investing in the stock market, most untrained investors find it risky and get ‘burnt’ because most of the time, they invest without knowing the fundamentals of the company and the stock market. They invest because they got a ‘tipoff’ or because of some random and often subjective criteria. It is puzzling why some untrained investors are willing to risk their hard-earned savings to invest in companies that they don’t understand.

Now consider what happens when one learns the right strategies to invest successfully. This investor would now be able to tell whether a particular company is profitable or just simply losing money year after year. He or she would be able to identify when is the best time to buy or sell a stock.

He or she would no longer risk his or her hard earn savings to buy unprofitable companies. Similar he or she would stay clear of buying companies whose price is currently on a downtrend (unless he or she is ‘shorting’ the stock). This investor would only invest in a stock provided that the stock fulfills a set of stringent and objective criteria. In other words, he or she would only invest in stocks that have a high probability of generating profitable returns.

Would investing be considerably less risky now? You bet!

As what legendary investor, Warren Buffett, once said, “Risk comes from not knowing what you are doing”. Indeed, if one aspires to invest successfully in the stock market, it would be prudent and sensible to first learn whatever he or she can about investing, before venturing into the stock market.

About your author

<p><center>Team Wealth Academy</center>

Team Wealth Academy

Wealth Educators

Team Wealth Academy is a dynamic team who strongly believes in promoting financial literacy to everyone. Founded in 2004, the team has successfully organized the widely acclaimed Wealth Academy™ Program regularly for more than a decade now.


Any content in this presentation should not be relied upon as advice or construed as providing recommendations of any kind. It is your responsibility to confirm and decide which trades to make. Trade only with risk capital; that is, trade with money that, if lost, will not adversely impact your lifestyle and your ability to meet your financial obligations. Adam Khoo Learning Technologies Group Pte Ltd (AKLTG) and its associated trainers are not liable for any losses incurred from your investment activities. Past investment performance is not necessarily indicative of future performance, even if the same strategies are adopted. All forms of investments carry risks. Such activities may not be suitable for everyone. This course presentation is not meant to be a recommendation to buy or to sell securities nor an offer to buy or sell securities. The publishers of Adam Khoo and AKLTG are not brokers, dealers or registered investment advisors and do not attempt or intend to influence the purchase or sale of any security. AKLTG does not guarantee the accuracy or completeness of the information displayed. This is shared purely for educational purposes only. 

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