Wednesday, March 19, 2008

No Such Thing as No Risk

We all would like guarantees that any investment we make will never lose money or value. The reality is that every investment has a certain amount of risk.

Whether you are purchasing real estate, stocks, bonds, mutual funds, annuities, gold, or even certificates of deposit there is risk.

The best you can do is evaluate what it is you are purchasing, be aware of the specific risks and potential rewards that asset has associated with it, know what if any recourse is available should something unexpected arise, and do not put all your eggs in the same basket.

We all know the stock market goes up more than it goes down over extended periods of time. Buying good quality stocks of a diversified nature and holding them through both down and up cycles will almost always show long term profit.

Real Estate has similar cycles. If you purchase a good quality property in good condition in a good area it will most likely increase in value over time.

The comparative safety of a certificate of deposit has the risk of locking into a low interest rate for an extended period of time and having your savings not keep up with the rate of inflation.

The next couple of articles will address some of the normal things to expect which can put a crimp in any investors plan. In other words “Stuff Happens” and there is a chance it could happen to you.

It doesn’t mean you should never take risk, just that some risks will pay off right away, and others may encounter some challenges along the way. It is often forces beyond our control that make it hard to predict.

Paula Straub
http://www.savegainstax.com/
savegainstax@gmail.com
760-917-0858

Fill out a Qualification Questionnaire and see if you qualify to save capital gains tax. Go to
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Find the “Definitive Beginner’s Guide to Potentially Saving Hundreds of Thousands of Dollars in Capital Gains Tax” at
http://www.savegainstax.com/sales.php

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