Investment Security

Investment security or investment safety supposed to be the first and possibly the most basic question that an investor seeks an answer before the investor make any investment.

 This basic requirement gains awesome importance if the amount the investor intends to invest is a disproportionately large part of his capital or it is all the wealth of the investor. Should the investment turn out to be a failure or mistake, then the investor could be ruined and he might need to start all over again. Hence, investment security or investment safety definitely is the top focus for investors before they make any move into investments. However, it is not easy to secure investment if the investors do not aware of the risk of the investments. No doubts, there is always some basic risk exists with every investment. Furthermore, income always correlates inversely with investment security or investment safety. The greater the risk, the lesser the investment security, however, return the investor higher income. That is the reason why the return for bank deposits are the lowest because the risk associated with it is the most minimum. The risk of loss of capital is practically non-existent. On the other hand, the returns on loans made are among the highest. This is due to the very real possibility that the loans may not be repaid, The example for this is the US credit crisis happened on 2008. The main cause for this crisis is because the citizens are not able to repay their house loan to the banks.

 

To secure investment, investors need to understand every risk that associated with the investment and prepare for the worst case if that risk happen.Nevertheless, investment security or investment safety still the top priority for investors to focus to ensure their wealth is increasing and not eroding.