Imagine a world where everyone has access to the financial services they need to succeed. Where small businesses can easily get loans to grow, and families can save for their children's education without having to worry about high fees. That's the world that DALU is working to create.

Something you might need: diversification

Diversification isn't just about protecting yourself from losses; it's also about enhancing your returns. Different asset classes tend to perform differently at different times. Stocks have historically outperformed bonds, but bonds are also less risky. By diversifying your portfolio, you can capture the potential returns of higher-risk assets while mitigating the risk of losses.

How risk tolerant are you?

It is simple. The larger earnings you desire, the larger your portfolio is going to be at risk. It fluctuates. This is the reason why you have to ask yourself how much are you willing and able to put at stake in regards to your financial security.

VITAL INFO

Investing is a crucial part of financial planning, but it comes with its own set of risks. Here are some key points to consider:

  1. Business Risk: This is the risk that something will happen with the company, causing the investment to lose value. These risks could include a disappointing earnings report, changes in leadership, outdated products, or wrongdoing within the company.
  2. Call Risk: Some bonds have a provision that allows the company to call back or repay a bond early. They will often exercise this right if they have to pay a higher coupon on an existing bond than what they would have to pay at today’s interest rates.
  3. Allocation Risk: Keeping the appropriate asset allocation is essential to managing risk as you move closer to retirement1.
  4. Political Risk: Investors in commodities like oil understand political risk. When Iran threatened to block the Strait of Hormuz, investors were concerned that the price of oil would become more volatile, putting their investment at risk.
  5. Market Risk: This is the risk that the overall market will decline, bringing down the value of individual securities with it.
  6. Interest Rate Risk: This is the risk that an investment’s value will change due to a change in the absolute level of interest rates.
  7. Inflation Risk: This is the risk that the value of assets or income will decrease as inflation shrinks the purchasing power of a currency. Inflation causes money to decrease in value at some rate, and does so whether the money is invested or not.
  8. Economic Risk: This can be defined as the likelihood that macroeconomic conditions like exchange rates, government regulation, or political stability will affect an investment.