{"id":6987,"date":"2025-04-17T09:00:16","date_gmt":"2025-04-17T09:00:16","guid":{"rendered":"http:\/\/213.146.202.110\/?p=6987"},"modified":"2026-06-08T10:56:05","modified_gmt":"2026-06-08T10:56:05","slug":"investment-risk-a-factor-to-manage-not-avoid","status":"publish","type":"post","link":"https:\/\/www.finantia.com\/en\/2025\/04\/17\/investment-risk-a-factor-to-manage-not-avoid\/","title":{"rendered":"Investment risk: A factor to manage, not avoid"},"content":{"rendered":"<p id=\"ember53\" class=\"ember-view reader-text-block__paragraph\"><strong>When it comes to investing, the word \u201crisk\u201d can be unsettling<\/strong>. Many people associate risk with the possibility of losing all the money invested, but this perception does not always reflect reality. <\/p>\n<p id=\"ember54\" class=\"ember-view reader-text-block__paragraph\">In fact, risk is an inherent feature of any investment and is directly related to its <strong>potential return<\/strong>.<\/p>\n<p id=\"ember55\" class=\"ember-view reader-text-block__paragraph\">Understanding the <strong>different types of risk<\/strong> and knowing how to manage them can make all the difference in building a balanced portfolio aligned with your financial goals.<\/p>\n<p>&nbsp;<\/p>\n<h3 id=\"ember57\" class=\"ember-view reader-text-block__heading-3\">What is investment risk?<\/h3>\n<p id=\"ember58\" class=\"ember-view reader-text-block__paragraph\">Investment risk refers to the uncertainty surrounding the <strong>returns of an investment<\/strong>. In other words, the value of an asset may rise or fall over time, resulting in gains or losses. <strong>However, it is important to distinguish between<\/strong>: <\/p>\n<ul>\n<li>Total loss risk: The most extreme scenario, which may occur, for example, in highly speculative investments or in companies that go bankrupt;<\/li>\n<li><strong>Volatility-related risk<\/strong>: Refers to the normal fluctuations in an asset\u2019s market price. An investment may experience ups and downs without this necessarily implying a permanent loss. Volatility is part of the market, and periods of decline may be followed by recoveries.  <\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3 id=\"ember61\" class=\"ember-view reader-text-block__heading-3\">Risk and return: an inevitable relationship<\/h3>\n<p id=\"ember62\" class=\"ember-view reader-text-block__paragraph\">One of the fundamental rules of investing is the relationship between risk and return: the higher the risk, the greater the potential return \u2014 but also the greater the likelihood of fluctuations in the value of the investment. In addition, the level of risk of an investment can be influenced by various external factors, such as the global economy and the political stability of the country in which the asset is based. <\/p>\n<p id=\"ember64\" class=\"ember-view reader-text-block__paragraph\">That is why there are different types of <strong>financial products <\/strong>for each <strong>risk profile:<\/strong><\/p>\n<ul>\n<li><strong>Low-risk investments (more predictable returns)<\/strong>: Term deposits, savings certificates and treasury certificates\u2026<\/li>\n<li><strong>Medium-risk investments (a balance between security and return)<\/strong>: Multi-asset investment funds, corporate bonds or real estate\u2026<\/li>\n<li><strong>High-risk investments (greater return potential)<\/strong>: Equities, cryptocurrencies, start-ups or venture capital funds\u2026<\/li>\n<\/ul>\n<p id=\"ember66\" class=\"ember-view reader-text-block__paragraph\">Each investor has a different profile, which determines their <strong>tolerance for risk<\/strong>: conservative (prefers security), moderate (seeks balance) and aggressive (assumes higher risk).<\/p>\n<p>&nbsp;<\/p>\n<h3 id=\"ember68\" class=\"ember-view reader-text-block__heading-3\">Different types of investment risk<\/h3>\n<p id=\"ember70\" class=\"ember-view reader-text-block__paragraph\">To better understand<strong data-start=\"495\" data-end=\"516\"> investment risk<\/strong>, it is important to know the different factors that can influence the behavior of an investment over time:<\/p>\n<ul>\n<li><strong>Market risk<\/strong>: Arises from fluctuations in financial markets due to economic, political or social factors;<\/li>\n<li><strong>Credit risk<\/strong>: Relates to the possibility that an issuer (such as a company or a government) may be unable to meet its obligations;<\/li>\n<li>Liquidity risk: The risk of being unable to sell an asset when needed, or only being able to sell it at a significant loss;<\/li>\n<li>Currency risk: The risk that changes in exchange rates will affect the value of an investment relative to the euro;<\/li>\n<li>Capital risk: The possibility of losing part or all of the amount initially invested. This risk is more evident in products such as equities or investment funds with greater exposure to volatile markets. <\/li>\n<li>Interest rate risk: Refers to the impact of changes in interest rates on the value of fixed-rate securities. When rates rise, bond prices tend to fall; when rates decline, prices rise. The longer the time to maturity, the greater the risk of price fluctuations due to interest rate movements over that period.   <\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3 id=\"ember73\" class=\"ember-view reader-text-block__heading-3\">How to manage investment risk in a smart way<\/h3>\n<p class=\"ember-view reader-text-block__heading-3\"><span style=\"font-size: 16px\">Knowing how to manage<\/span> <strong style=\"font-size: 16px\" data-start=\"1291\" data-end=\"1312\">investment risk<\/strong> <span style=\"font-size: 16px\">is essential to build a balanced portfolio suited to your financial goals. For that, there are some practices:<\/span><\/p>\n<h4 id=\"ember75\" class=\"ember-view reader-text-block__paragraph\"><strong>Know your investor profile<\/strong><\/h4>\n<p id=\"ember76\" class=\"ember-view reader-text-block__paragraph\">Before investing, it is essential to identify your <strong>level of comfort with risk<\/strong>. If you prefer stability, you may opt for more conservative investments; if you seek higher returns and are willing to accept fluctuations, you may invest in more volatile assets. <\/p>\n<p>&nbsp;<\/p>\n<h4 id=\"ember78\" class=\"ember-view reader-text-block__paragraph\"><strong>Diversify your investments<\/strong><\/h4>\n<p id=\"ember79\" class=\"ember-view reader-text-block__paragraph\">Diversification is one of the most effective strategies to reduce risk. <strong>Spreading investments across different asset classes<\/strong>, sectors and geographies helps to minimise losses and balance the portfolio.<\/p>\n<p>&nbsp;<\/p>\n<h4 id=\"ember81\" class=\"ember-view reader-text-block__paragraph\"><strong>Set clear financial goals<\/strong><\/h4>\n<p id=\"ember82\" class=\"ember-view reader-text-block__paragraph\">Investing without a defined goal can lead to impulsive decisions. Before committing your money, ask yourself:<\/p>\n<ul>\n<li>Are you investing for the short, medium or long term?<\/li>\n<li>What return do you expect?<\/li>\n<li>Are you willing to wait several years for sustainable growth?<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h4 id=\"ember85\" class=\"ember-view reader-text-block__paragraph\"><strong>Invest in a disciplined way and with a clear strategy<\/strong><\/h4>\n<p id=\"ember86\" class=\"ember-view reader-text-block__paragraph\">Investing regularly and avoiding emotion-driven decisions helps<strong> reduce the impact of market volatility<\/strong>. Strategies such as periodic investing (DCA \u2013 <em>Dollar Cost Averaging<\/em>) can help mitigate the risk of entering the market at an unfavourable moment. <\/p>\n<p>&nbsp;<\/p>\n<h4 id=\"ember88\" class=\"ember-view reader-text-block__paragraph\"><strong>Stay informed and up to date<\/strong><\/h4>\n<p id=\"ember89\" class=\"ember-view reader-text-block__paragraph\">Keeping track of the economy, financial markets and available investment products is essential for making more informed decisions. <strong>Knowledge is the best way to manage risk<\/strong>.<\/p>\n<p>&nbsp;<\/p>\n<p id=\"ember92\" class=\"ember-view reader-text-block__paragraph\"><strong>Investment risk should not be seen as an enemy,<\/strong> but rather as a natural feature of financial markets. The key to making sound decisions lies in understanding the different types of risk and choosing strategies that are appropriate to your profile and financial goals. <\/p>\n<p id=\"ember93\" class=\"ember-view reader-text-block__paragraph\">By adopting a <strong>conscious and well-informed approach<\/strong>, you can turn risk into an opportunity and invest in a safer and more efficient way.<\/p>\n<p id=\"ember94\" class=\"ember-view reader-text-block__paragraph\">If you wish to explore investment solutions tailored to your profile, consult <strong><a class=\"buxWJtzTkvojqTcWmwRQyhFcnEPZxwis \" href=\"https:\/\/www.finantia.com\/pt\" target=\"_self\" data-test-app-aware-link=\"\">Banco Finantia<\/a><\/strong> and discover, with the support of our team of specialists, <strong>options aligned with your financial goals.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<hr>\n<p>&nbsp;<\/p>\n<p><small>This communication was produced by Banco Finantia for information purposes only and does not constitute an investment recommendation. In preparing this communication, no investment objectives, financial situations, or specific needs of investors were considered. Accordingly, the information was not tailored to any actual or potential investor, nor were any specific circumstances of such investors taken into account. <\/small><\/p>\n<p><small>The information disclosed is based on market conditions prevailing at the time, as well as on information obtained from recognised third-party entities, which are public sources. Banco Finantia has not independently verified the data or information provided by those entities. As the recipient of this communication is aware of this situation, Banco Finantia cannot, under any circumstances, be held liable for any errors, omissions, or inaccuracies contained in this document or arising from the use of such information. Banco Finantia accepts no responsibility for any direct or indirect losses or damages that may be incurred by those who carry out transactions based on the information provided.  <\/small><\/p>\n<p><small>Banco Finantia\u2019s investment policy, whether acting on its own account or on behalf of its clients, is entirely independent of the content of this communication. The Banco Finantia Group may hold positions in, or trade, the securities or financial instruments referred to herein, before or after the issuance of this communication, and may also provide, or seek to provide, banking services to the issuers of such securities or financial instruments. <\/small><\/p>\n<p><small>Banco Finantia\u2019s competent supervisory authority is the CMVM, with which it is registered under number 109.<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When it comes to investing, the word \u201crisk\u201d can be unsettling. Many people associate risk with the possibility of losing all the money invested, but this perception does not always reflect reality. In fact, risk is an inherent feature of any investment and is directly related to its potential return. Understanding the different types of [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":6986,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[89],"tags":[91,92],"class_list":["post-6987","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-literacy","tag-financial-literacy","tag-investment"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/posts\/6987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/comments?post=6987"}],"version-history":[{"count":2,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/posts\/6987\/revisions"}],"predecessor-version":[{"id":9433,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/posts\/6987\/revisions\/9433"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/media\/6986"}],"wp:attachment":[{"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/media?parent=6987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/categories?post=6987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/tags?post=6987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}