Practice the awareness of investment risk prevention and see what financial management faces.

No matter where you go, there are always risks. So is financial management. As long as it is investment, there is risk, which is one of the laws of investment. In addition to the difference between high and low risks, they are also different in nature. Common risks are as follows.

(1) financial risk: for stocks or bonds, if the company is poorly managed and in poor financial condition, the price of the stocks or bonds will fall, and even dividends cannot be distributed, which will also make the bondholders unable to recover the principal and interest.

(2) Market risk: When investing in stocks and futures, market fluctuation will make their prices change accordingly, so there will be the risk of loss.

(3) Inflation risk: Inflation will make money worthless and lose its original purchasing power. If the return on investment is lower than the inflation rate, you will only lose money. For example, if the current inflation rate is 15% and the bank deposit interest rate is 10%, then what cost 100 yuan a year ago will now cost1/5 yuan; If you put your money in the bank, you will only have 1 10 yuan one year later, and you can't buy anything with a price tag of 100 yuan a year ago. This is the risk brought by inflation. When inflation intensifies, it has the greatest impact on financial assets, while the impact on real estate and gold is relatively small.

(4) Interest rate risk: changes in market interest rates will also cause losses to investment. For example, if you invest in bonds, the increase in market interest rate will lead to the decline in the value of bonds, resulting in losses.

(5) Risk of changes in the economic situation: the economy has ups and downs, and the cycle is endless. When the economy is booming, real estate, stocks, collectibles, some futures and even precious metals will appreciate; When the economy is depressed, it is more advantageous to hold cash and bonds, while the prices of stocks and real estate will fall. A perfect financial portfolio should include different investment projects, and diversified investment can reduce the risks brought by economic fluctuations.

(6) Industry risks: Sometimes, although the economy itself is booming, some industries are getting more and more depressed. Even people in the industry, even investment experts, may fail miserably because they can't see the prospects clearly. As an outsider, don't concentrate your money on a tool. Only by distinguishing "sunrise industry" from "sunset industry" can we have a good investment prospect.

(7) Liquidity risk: refers to the risk that an investment cannot be converted into cash when needed. Bank deposits, bonds and most stocks can generally be realized quickly, with low liquidity risk, while real estate and private collections are not easy to realize, with high liquidity risk.

In the ever-changing, complex and unpredictable investment world, all kinds of uncertain things may happen. Risks cannot be avoided, but they can be prevented. The above is the awareness of investment risk prevention in political and financial sharing. What risks does financial management face? If you want to know more about investment and financial management, you can search Ganzheng Finance. We are your most intimate investment and financial management partners. Ganzheng Finance is a crowdfunding platform that provides investment and wealth management.