If you’re a fan of political dramas on televisions, you’ll know that the turbulent world of politics has an affect on the global financial markets. But what about in real life? How much does art - if you can call shows like Scandal, Veep, and House of Cards art - imitate life, and vice versa?
stock market risk
Once an individual or family has reached a point in their lives that they have enough income to easily pay their basic living expenses and other bills, they often desire to put their excess monthly cash flow to work in an investment.
Perhaps the most important factor in formulating your investment plan is your risk tolerance; that is, the amount of risk you’re willing to assume in order to achieve your most important objectives.
All investors – be they conservative, moderate or aggressive – need to understand that the level of returns they expect to generate is directly related to the amount of risk they are willing to assume – the higher the return, the higher the amount of risk one needs to take.
In my opinion, it is impossible to predict future stock market returns. Investment models can produce hypothetical returns but they can’t account for future events. So, in my opinion, investors who manage their investments based on market performance or what they perceive as opportunities for better returns have very little control over the outcome.
We all have a certain emotional attachment to our money, which is very logical since we work hard to earn it. We don’t always make the best financial decisions with our spending, especially when we are in heightened emotional states.