In recent years, the world has experienced one of the worst recessions it has ever gone through. Indeed we are still in the process of picking ourselves up and seeing what damage has been caused. Many people have seen their investments shrink in value, so it should come as no surprise to learn that some people are nervous about making investments at this time.
Maybe you are one of them. Maybe you never look at how the stock market is performing, or if you do you are skeptical of its ability to provide the returns you would like, without risking your money unduly in the process. It’s true that some people are better at accepting risk than others – in all areas of life – and this is certainly true with regard to investments.
So what do you do if you don’t like the idea of risk when investing your money?
Figure out what your risk appetite actually is
Some people will go all out to try and find the investments with the biggest returns. Of course these are the investments that also carry the biggest risks, but their desire to earn as much as they can outweighs the risks in their eyes.
Others shun the stock markets and other types of investments completely, preferring to stay with what they know. Do you fall into this group? It is worth bearing in mind that you may actually be slightly above this group, not willing to take much risk but open to trying something other than the highest paying bank account.
Discover more about the different types of financial products on the market today
If you have always stuck with a regular account and a savings account you may not know the range of options that are available for those looking at investing their money. It isn’t a question of all or nothing – there are plenty of options in between as well, some of which mitigate the risks of taking on a more daring investment.
By researching everything that is available you might find something that appeals to you more than a standard bank account. You don’t have to invest unless and until you are happy to do so, but you never know what you might find by looking.
Consider whether you could find a financial product that offers better returns than the standard bank account but also limits risk
This really leads on from what I mentioned above. Many people seem to have the opinion that there are only safe investments and highly risky and volatile ones. But there are many ports of call in between that could be worth exploring in more detail.
Only you know what degree of risk – or lack thereof – you are willing to be comfortable with. You may find over time you are more willing to step up to the next level. But be sure you stay with what you are comfortable with and don’t let anyone else encourage you to go beyond that comfort level when you’re not ready.