If you are staying away from investing, as many people do, for the fear of risk, you may actually be putting your financial situation and goals at risk. Holding all your savings in a savings bank account—which is today’s equivalent of putting money under the pillow—may eliminate the risk of losing the absolute value of the principal, but the low returns that your money will earn will mean two things: one, you aren’t able to accumulate the corpus; and two, you will lose the real value of the amount invested.
If you trade some degree of safety for higher returns, you will be able to protect your goals in the long run. Here are a few ways in which you can balance investment risks.
