Manage your financial risk

Money management is always associated with risk. You can learn to limit your investment risk.

The company’s financial and operational risk is when the company does not make a profit. The operating activity relates to sales, production and employees and the financial activity concerns loans and investments. Interest rate risk is when central banks set high interest rates. This means a fall in the prices of our assets and higher interest rates on loans. Inflation risk is a loss of money that changes over time. Central banks raise interest rates to lower inflation. It is important to familiarize yourself with the tax system as changes in the law affect the profits.

Politics influences stock market situations because it creates an economic environment. Currency risk refers to investors trading on foreign exchanges. Exchange rates determine the cost of companies in case of import and export. The risk of raw materials prices is for companies that use raw materials for production and companies producing raw materials.

To reduce risky factors, diversify your portfolio. Invest in several different companies and different sectors. Use a variety of fundamental and technical analysis techniques. Quickly close lossy positions, small losses are easier to recover. Read information, financial reports.