Today’s video is all about how to choose your first investment. It might feel like a daunting task, but it doesn’t need to be. We’ll cover ‘Paralysis Analysis’ and how it can be avoided, talk about goal setting and delve into risk, amongst other things. Some example risk questions as mentioned in the video: 1. Imagine you have invested £100,000. Which of the five scenarios below would you want for your investment portfolio? Best-case increase (£) Most likely result (£) Worst-case losses (£)
Scenario 1 13,000 3,000 –11,000
Scenario 2 15,500 4,000 –12,500
Scenario 3 20,000 5,000 –16,500
Scenario 4 24,500 6,000 –21,500
Scenario 5 28,000 6,500 –25,500 2. Investing involves a trade-off between risk and returns. In the past, investments with higher returns have been associated with greater risk and chance of loss. Whereas cautious investments that have had a lower chance of loss also have achieved lower returns. Which of the following statements best describes your attitude to risk? – I am most concerned with risk. I am willing to accept lower returns in order to limit the risk of loss.
– I am willing to accept some risk and chance of loss in an effort to achieve modest but somewhat higher returns.
– I am willing to accept moderate risk in order to achieve higher returns. Reducing risk and increasing returns are equally important to me.
– I want to achieve strong returns on my investments. I am willing to accept somewhat higher risk and chance of loss.
– I am mainly concerned with getting the highest possible returns on my investments. I am willing to accept significant rises and falls in the value of my investments and a significant chance of loss. Here’s the link to our ‘How to Pick Stocks’ Video mentioned at the end:
https://www.youtube.com/watch?v=_IAnZD4a7OQ Оur Investing 101 series will cover the fundamentals of investing and will try to bring you the basics to build a solid foundation. Let us know in the comments for future topics you would like to see covered in these videos. 0:00 – Intro
0:46 – Narrow down the choice
3:47 – What are your goals?
5:05 – What is your risk tolerance?
7:27 – Risk Questionnaire Visit us at https://trading212.com Download our free mobile apps for iOS or Android:
https://trading212.com/GetTheApp Tom's personal YouTube channel: https://www.youtube.com/c/thatfinanceshow #Stocks #Investing #Investing101 #Trading212 #Trading #equities At Trading 212 we provide an execution only service. This video should not be construed as investment advice. Investments can fall and rise. When investing, your capital is at risk.