All Investment are Liable to Fail and money Lost. (Factors that could lead to investment loss)
Investment is often done with the intent to generate profit but not all investments bring in profit. Some can be equal to losses, thereby causing the investor to lose all or part of their money even when the investor anticipated to make a good sum of money as profit. Investment is a risk game and investors are bound to lose or gain, there are no two ways about it.
While some investment could lose blatantly, some could lose as a result of inflation when the investor didn’t take proper risk caution. A person could make profit on their investment but have the value of their investment and its profit lose its purchasing power over the years as a result of inflation. Also, investment could lead to a loss as a result of the interest rate expected on the investment. If a person buys a bond at a lower interest rate only to sell when the rates are higher, there is a high possibility that the investor will be losing money as people will not be willing to buy a bond with lower interest pay.
Investment risk can’t be averted but can be minimized. In most cases, the risk comes as a result of unforeseen circumstances such as economic issues like a recession, political issue like the government taking over all private property, or losing his investment to war or regulation.
One type of investment loss that people experience is one from based on forex and foreign investment. A person can buy a currency a 1X currency for 50 Y local currency and then invest the X currency in businesses abroad, soon the businesses make profit and then the person decides to sell off the investment so as to keep profit but after converting back to local currency, the person realize that the money at hand before purchasing the X foreign currency due to local currency strengthening against the foreign currency at the foreign exchange market.
Investment loss can go on through a long list. Other investment loss could be as a result of lack of liquidity, bad timing, and so on. It is important to look into every investment before investing as all investment has a high possibility to lose and/or fail.
Great article that you share with us in this opportunity linked to the possible losses that can be generated in a certain investment.
As you very well express:
You share with us excellent points of view that allow us to have a better understanding of the topic raised, thank you for sharing such a rich and accurate content. Successes.
Thank you so much, I appreciate the feed back.
There is obviously no certainties attached to any investment paying off, there are different reasons why an investment might not pay off it is a risky venture.