Investment Risks You Need to Know

Interest rate risk is the risk that the relative value of interest-bearing assets, such as loans or bonds, will deteriorate due to an increase in interest rates. This risk can be interpreted as a risk caused by changes in interest rates on the market so that it will affect investment income. In general, if interest rates increase, the price of fixed-interest bonds will fall, and vice versa. Interest rate risk is generally measured by the term of the bond, the oldest technique currently used to manage interest rate risk. How to? Further info you can learn at http://www.forexkenya.net/forex-brokers-kenya.html.

For example, in general, the bond interest rate is 8-10%, but then the government issued Retail Sukuk which has an interest rate of up to 12%. That way, investors will prefer this Retail. This market risk is the risk of fluctuation or fluctuation in Net Asset Value caused by changes in financial market sentiment (such as stocks and bonds) which is often referred to as systematic risk, meaning that this risk cannot be avoided and will certainly always be experienced by investors. . This can even make investors find capital loss. This change can be due to several things such as an economic recession, issues, unrest, speculation, including political changes. For example, a president’s health issue then gives a fluctuation in the value of the rupiah against the dollar which then rises. You don’t need to panic and immediately withdraw your investment funds when you face market fluctuations. This is because the decline or increase in assets like this does not happen continuously.

Inflation risk also described as obtaining power prospect, is the opportunity that the cash flow from an endowment will not be worth as much in the infinity due to differences in purchasing power due to inflation. This risk has the potential to harm people’s purchasing power for investment due to an increase in the average consumption price. Inflation risk is the risk that investors take when holding cash or investing in assets that are not linked to inflation. The risk is that the cash value will be reduced by inflation.

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