Every investment comes with some type of risk. There is a chance that you will lose your money. If you work with an investor who tells you otherwise, that’s a red flag. They’re not being honest with you, and you have to ask yourself if they really have your best interests in mind.
Some of the various risks that you may face, depending on the type of investing you do, include:
- Opportunity risk
- Inflation risk
- Market risk
- Operational risk
- Liquidity risk
- Credit risk
For instance, market risk is inherent in many types of investing, and it is impossible to predict accurately every single time. Now, if you work with a financial team to help you invest, you do want them to make predictions and read the market. Their job is to be as accurate as possible. But not even they can get it right 100% of the time and therefore eliminate the risk entirely.
All that being said, you do have a right to know what the risks are. If you work with a team that does not tell you the risks or negligently takes unauthorized risks with your accounts, it can seriously hurt your financial position. That’s a problem. The fact that “risk always exists” is not an excuse. They still have to work in your favor and put you first.
When they don’t do this, you may need to look into all of your legal options. In cases of negligence or even cases where they broke the law, you may be able to seek financial compensation for your losses.
