What is Financial Investment Risk Management?
Financial investment risk management has become more meaningful in today’s violent and volatile markets. What is financial investment risk management one may ask? It is simply a variety of techniques employed by investors to manage, control and limit losses, and at the same time maximize their profit potentials. Financial investment firms face uncertain market conditions. The following tools and strategies are often employed to achieve these objectives. Stop Loss Orders Stop loss or limit orders are used to limit portfolio losses. For instance a company with position in currency markets understand that bad overseas news influence currency market action. Such company would b e ready to act when and if negative or positive news which could affect their profit or loss breaks out. They may use stop loss limit orders in combination to exit their positions when unfavourable news that could drastically compound losses in their position breaks out. The process is simple. Such investment firm w
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