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Risks are Important to Your Investment Portfolio

When looking into creating an investment portfolio you’ll come across a wide range of different theories and risks. Some people say that you should be defensive when first starting your portfolio, while others disagree. There are so many different opinions on the subject that after a while you don’t know where to look.

The simple fact of the matter is that you should build an investment portfolio you’re comfortable with, and only you will know when this is complete. Of course, this depends on your situation, but you should be both defensive and taking risks at the same time. Without a blend of the two you will fail to keep up with the market.

For defensive minded people there is the problem of inflation risk. Image you are standing in the street with a $5 in your hand. The value of your money will decrease every year you stand in the same position. Until you can no longer use this money as well as you could. In order to fight against the inflation  you’ll need to take some risks.

Of course, this doesn’t mean gambling. Simply investing in stocks, or bonds, which are considered safe will help fight against inflation risk. But there are also the options of investing in gold & silver, Treasury Inflation-Protected Securities (OTC:TIPS) or annuities.

Inflation is always rising, and to stay standing still will only lose you money in the long run. For more information contact the Winflow Financial Group.