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Risk Management

Risk management is the key component in financial planning. It is a cyclical process of identifying, analyzing, evaluating and treating loss exposures and monitoring risk control and financial resources to lessen the adverse effect of loss through uncertain economic condition. Risk analysis and management is necessary to have a well-diversified portfolio. Financial Risk Management focuses on how to balance losses/gains by using financial instruments to manage exposure to risk. With the growing abundance in liquidity, there is a risk of sudden and sharp increase of volatility in financial markets. Since future is uncertain and financial environment always keep changing, risk management will help to improve the performance of the existing financial resources by analyzing and identifying any future threat. While managing financial risk, Investment risk is ideally divided into inflation risk, market risk, interest rate link, credit risk on returns on vivid assets. It curbs the risk of suffering of any deficit at the times of covering future liabilities. Financial risk managers demonstrate superb skills while analyzing, controlling and assessing investment risk for individuals. They provide variety of functions and solutions related to risk management enabling you to be on the safer side of your financial goals. By combining comprehensive risk management planning with financial planning, risk managers assures a healthy financial return over investments made. Due to Growing economy, globalization and volatility of assets both risk and opportunity is getting closer in an accelerating pace leading to emergence of risk management. To plan your finances strategically by analyzing and assessing potential risk and uncertain future, managing financial risk have become very important.

Asset Allocation

risk-management

Time to Rebalance

With an asset allocation strategy, you can't just allocate assets in your portfolio once and then forget about your portfolio. Over time, your actual asset allocation will stray from your desired allocation because different investments in your portfolio will experience different rates of return. At least annually, review your portfolio to see if changes are needed to bring your allocation back in line. Some factors to consider include: Reevaluate your desired asset allocation percentages,... more

Investment Risk

risk-management

How to Plan for Risk in Your Portfolio by Knowing Your Tolerance and Capacity

Summary: Tolerance and capacity are two ingredients of risk when it comes to investments and retirement planning. We look at what they are, and what kind of critical impacts they can create when planning for your golden years.   When we think about recipes for well-funded retirement plans we often start with some basic concepts. One of them is that investments are at the root of preparing for our post-work years. Packed into our investment portfolios, however, is a separate... more