There are a lot of risks that need to be taken into consideration before an investment can be made. Interest rates are the most important when it comes to the full understanding of investing risks. When an investor buys any kind of security that offers a fixed rate that guarantees the return, they are exposed to facing the interest rate risk. Interest rate risk means possible declination of the value of fixed rate debt instrument due to interest rate rising. It is the most common investing risk. The better our clients understand the interest rate risks, the better we can help them to surpass the dangers of it. Learning and educating yourself about anticipating those risk rates will help our clients to make their moves for their own benefits.
Every security that a potential investor may buy comes with a certain business risk. This risk is the measure of risk that is directly related to that security. Known also as unsystematic risk, business risk is directly associated with the possibility that the certain issuer of a bond or a stock may be unable to cover or pay in full the principal or the interest. Among many others, the most important risks are credit and taxability risks, call and inflationary risks, liquidity, market, and reinvestment risks as well as currency and exchange rate, political, social and legislative risks. All these factors need to be taken into consideration before our clients decide to make an investment.
Due to all these issues that may come from the risk of making an investment, our job and duty are to make it easier for our clients by taking care of all these risks, using our expertise and specialty. Before we make a financial plan and all accounting calculations in order to consult and advise you, we take all these risks into our consideration, evaluate them and then, make a long term plan that will be beneficial to both our clients and us. Anticipating all the risks that may come is what we do with pleasure.