Investing will always carry a risk, no matter how good or bad the market is perceived to be. Markets do however, tend to move in cycles, hence it is important to invest in a well-balanced portfolio over a long period of time, where the chances of losing money are minimised.

Important factors to consider include: the type of investment,the term of the investment and the amount invested. This can be confusing, even overwhelming at times. However, seeking advice from credible individuals and institutions will assist with weighing the options and the risks involved.

There is a prevailing myth that only the wealthy can invest. There are, however, many investment options available, involving a range of sums and time frames. Investing small is still a good start. A unit trust for instance, is an excellent way to invest. Unit trusts are collective investment schemes, where the money invested is pooled, and the collective money is then invested. The risk in this kind of investment is understandably low as individuals will not be personally participating in the stock market and will have the benefit of professionals managing their money.

Another option would be to diversify. This can be done by seeking opportunities for offshore investments, which may seem risky, but these kinds of investments do not experience the volatility of local markets – and there are many international economies experiencing rapid growth, all of which are projected to continue on this growth trajectory.

When it comes to high returns, time is definitely an ally. The more time there is, the longer the investments are able to weather market volatility. The converse is also true. Discovery Invest points out that time is what will determine how much risk is involved. If there are only a few years left before retirement it might not be wise taking on a high-risk investment, where the possibility of losing money is high over the short term. Although low-risk investments have a lower return, Forbes suggests that they might be the best option for late investors. Cultivating patience and adopting a long-term perspective are important assets in themselves and seeking help and advice from trusted advisors is crucial. Just because your investment is on an incline is not necessarily a reason to sell – its value may increase even more over time. There is also no guarantee that investments will bounce back after declining – it is of paramount importance to know when to let “bad” investments go.

The asset classes

Cash

Bonds

Equities

Property