Risk Hai Toh Ishq Hai!
I am sure this line worked much better than Mutual Funds Sahi hai, campaign to get people .To invest in the stock markets. Everyone wants to earn profits on their investments. And also everyone wants to be the Big Bull of the market.
But do we understand what this risk is?
And can we afford to take risk. By the way understanding the share market becomes easy with examples. So if you’re new to investing make sure to check it out.
Before we go to market let us start from a farm. We have a bear here who uses its paw to beat things down. And we have a bull who throws things up with its horns.
Bear Market and Bull Market depends on people’s sentiments.
A bear market is filled with pessimism (sellers>buyers) where people don’t want to invest their money. On the contrary, a bull market is one that is filled with optimism where higher deman causes the prices and market to rise. But this farm doesn’t have only bulls and bears. Ther are alos ships i.e., people who follow other’s tips, don’t research by themselves and believe in following the direction of the crowd.
There are also ostriches who hide from good opportunities. This farm also has pigs who get quiet greedy. They don’t understand the risks and end up making losses. Jim Cramer has said “Bulls make money, Bear makes money, Pigs get Slaughtered. Taking decisions without understanding risks is like gambling.
But what is this risk that is presenting in Investing?
I want my money to work for me and earn more money. Money can be put to work in different places. Just like we get paid a salary when we work. The only difference is this ‘salary’ can be positive and it can be also negative(make losses).
You know risk also has its own types like;
Inflation Risk, Default Risk, Liquidity Risk, Re-investment Risk, Business Risk, Exchange Risk, Interest Risk, Market Risk and many more. This are some types of risk we should know.
So basically, in life, in funds, and if you what to be a businessmen then taking a risk is necessary.
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