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Investment tips: If you're not prepared for the loss you shouldn't take the risk

14 October 2021 9:00 PM
Tags:
Warren Ingram
The Money Show
Bruce Whitfield
Personal finance
Galileo Capital
investing
investment portfolio
risk and reward
investment risk
investor emotion
risk tolerance

Bruce Whitfield talks to Personal Financial Adviser Warren Ingram about understanding your individual risk tolerance.
© flynt/123rf.com

Investing is a risky business but, of course, with risk can come great reward.

But how do we understand the risk in our investments?

And guard against the feeling we're missing out when others benefit from rocketing shares?

RELATED: I checked out stock market when I was bored - SA teen coins it in GameStop rally

Bruce Whitfield gets expert insight from Warren Ingram, Personal Financial Adviser and Executive Director at Galileo Capital.

Ingram says once you know your risk comfort level, you can build your portfolio and expectations accordingly.

When someone says 'I'm interested in high-growth investments, I'm tired of predictable investments'... my first question is going to be: When would you like me to notify you about the losses?

Warren Ingram, Personal Financial Adviser and Executive Director - Galileo Capital

Do you want me to tell you when you've lost half your money? Or 75%?

Warren Ingram, Personal Financial Adviser and Executive Director - Galileo Capital

Discussing losses when a client is asking for high-growth investments turns into an awkward conversation, says Ingram.

"It's now what they want to hear."

High growth is a nice thing to aim for, but let's talk about the risk first. That's the conversation people aren't really having with their friends on social media when they start to talk about this.

Warren Ingram, Personal Financial Adviser and Executive Director - Galileo Capital

But you do need to take _some _market risk, comments Whitfield.

You make investments with the very best intentions and you try to mitigate your risk as much as you possibly can, but you don't want to de-risk your investments to the point of, for example, cash in a low-interest rate environment.

Bruce Whitfield, The Money Show host

If boring and predictable means you've bought a basket of shares... and you're only getting the performance of the stock market, just understand that's pretty amazing. The stock market over long periods of time creates many millionaires and, in certain cases, billionaires.

Warren Ingram, Personal Financial Adviser and Executive Director - Galileo Capital

I say ride the course because, over time, that's where you really make money.

Warren Ingram, Personal Financial Adviser and Executive Director - Galileo Capital

Bear in mind that while markets and the information flow might be moving more quickly, the people making the buying decisions are still the same he says.

Markets are not driven by technology, markets driven by human beings... and as human beings we haven't really changed at all in a few thousand years...

Warren Ingram, Personal Financial Adviser and Executive Director - Galileo Capital

Listen to Ingram's sound investment advice in the audio clip below:


This article first appeared on CapeTalk : Investment tips: If you're not prepared for the loss you shouldn't take the risk




14 October 2021 9:00 PM
Tags:
Warren Ingram
The Money Show
Bruce Whitfield
Personal finance
Galileo Capital
investing
investment portfolio
risk and reward
investment risk
investor emotion
risk tolerance

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