How risky is the stockmarket and how can I minimise the risk?
Share investment is risk investment. That being said, by purchasing a balanced selection of shares, it is possible to limit the risk profile of your investment portfolio. Somebody approaching retirement is likely to arrange their share investments to minimize risk while a young professional may be willing to take greater risks in the hope of securing higher returns. One basic rule of thumb suggests an inverse ratio of age to stockmarket exposure. Thus at age 30, 70% of your investments would be in the stockmarket or related collective investments but by age 65, only 35% of your investments would be equity-based. This is a very rough and ready measure that takes no account of your attitude to risk. Highly paid risk managers are highly paid to go into much greater detail (do you prefer a cautious / balanced / adventurous approach?) but it provides a starting point for you to think about your portfolio and about the kind of risks you may or may not be prepared to take with your investment
