Understanding investment risks

Investing always involves some degree of risk, so you must understand these before deciding on your investment approach. ST PHOTO: LIM YAOHUI
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High-risk funds have a potential for offering higher returns. Usually the bigger the potential for making money on an investment, the higher the risk involved.

You can protect yourself and manage risk well by diversifying your investments across a number of fund options. This is called diversification, says Mr Kelvin Lam, head of retail distribution for South-east Asia at Allianz Global Investors.

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A version of this article appeared in the print edition of The Sunday Times on July 07, 2019, with the headline Understanding investment risks. Subscribe