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MY

Don’t let the word “risk” scare you. Portfolio risk is just about understanding how your investments can go up and down like a rollercoaster 🎢. It’s the potential uncertainty that may impact your money moves.

 

Think of your investment portfolio like your squad. It is a mix of different wealth products (a.k.a investments) such as stocks, bonds, crypto, mutual funds and even real estate.

 

Each squad member has its own personality. Some are wild and unpredictable (looking at you, crypto), some are chill and steady (like fixed deposits and bonds) and some are just vibing in between.

Why should you care about risk?

If your squad is full of wildcards, you might hit big wins or crash hard. Yes, high risk = high returns, but the flipside is you could lose it all.

 

Risk matters because:

 

  • It affects how fast you grow your wealth.
  • It determines how much stress you’ll feel during market dips.
  • It helps you align your investments with your life goals.

How can you manage risks in the portfolio?

Step 1: Know your vibe

Are you a risk-taker or a safe player?

 

💡 Tip: Complete a risk assessment questionnaire to understand your risk appetite.

Step 2: Balance your squad

Mix risky assets (stocks, crypto) with safer ones (bonds, fixed deposits).

 

It’s like having introverts and extroverts in your squad — your investments need both energy and stability.

Step 3: Diversify like a pro

This is called portfolio diversification. Even if one investment tanks, others might still be vibing strong and save your portfolio from a total meltdown.

Step 4: Check your portfolio regularly

Make sure your squad is balanced. Rebalance if needed.

Step 5: Keep calm and look at the long-term

Markets will go up and down. Don't panic, assess before you buy or sell.

What are the common risks to watch out for?

  • Market Risk: When the whole market dips — like a bad day for stocks.
 
  • Credit Risk: When a company you invested in can't pay you back.
 
  • Liquidity Risk: When you can't sell your investment quickly without losing money.
 
  • Inflation Risk: When your money's value drops because prices go up.

So, what's the move?

Portfolio risk is just how much your investments can go up and down. Mix different types of investments to spread out the risk. Keep it balanced, know your risk style and stay chill — your money will thank you later.

 

Start small. Ask questions. Diversify wisely. Track your portfolio regularly with CIMB OCTO App. And remember: your portfolio should reflect your goals, your values, and your vibe.

 

References:

 

 

 

This article is for informational purposes only and CIMB does not make any representation and warranty as to the accuracy, completeness and fairness of any information contained in this article. As this article is general in nature, it is not intended to address the circumstances of any particular individual or entity. You are advised to consult a financial advisor or investment professional before making any decisions based on the information contained in this article. CIMB assumes no liability for any consequences arising from your reliance on the information presented here.