No journey is risk-free. Imagine heading out on a road trip. Even with a well-planned route, things can change – bad weather, roadworks, delays. But you prepare. You pack snacks, plan rest stops, and stay flexible.
It’s the same with investing. You can’t control everything, but that doesn’t mean you shouldn’t start. For many women, concerns about losing money or making mistakes can feel like a reason to delay. But with the right support and a solid plan, risk becomes something you manage rather than something to fear.
Let’s talk about risk
Risk doesn’t mean being reckless. It simply means your investment’s value might rise and fall depending on what’s happening in the world.
Markets move for all sorts of reasons: politics, economic shifts, global events. Think of it like crossing a river – the water might be choppy, but with a sturdy boat and a good guide, you can cross safely.
Some choose to stay on the riverbank, keeping their money in cash savings to avoid these ups and downs. But that carries its own risk. Inflation erodes the value of your money over time, meaning it may not stretch as far in the future.
Investing in line with your goals and comfort with risk means you’re not taking on more than necessary or holding back so much that you miss out on growth.
Feeling nervous? That’s normal, and a strength
- Starting something new can be exciting and uncertain. Investing is no different. If you’re new to it, it’s natural to feel cautious. You might be wondering:
What if I lose money? - What if I make a mistake?
- What if I don’t understand what’s going on?
These are all valid concerns. But they’re also part of the learning process.
Women, in particular, often feel they need to know more before they begin. That hesitation can delay action, but it also reflects a thoughtful mindset. Research from the University of California found women often outperform men as investors because they take a steady, long-term approach and stay focused on their goals.1
Three smart ways to manage risk
You can’t eliminate risk, but you can manage it wisely. Whether you’re starting out or refining your plan, here are three smart strategies:
Diversify your investments.
Spread your money across shares, bonds, alternatives, and different geographies to reduce the impact of any one investment underperforming. It’s like planting a garden: not every flower will thrive, but variety gives you the best chance of success.
Invest for the long term.
Markets rise and fall, but over time, consistent investing tends to smooth out the bumps. Setting up regular contributions and investing long term is often more effective than trying to buy low and sell high.
Make it personal.
Your goals should shape your risk level and how you manage it. Whether you’re saving for retirement, supporting your children’s future, or building financial independence, an investment manager like Brooks Macdonald can help create a plan that fits you. It’s like working with a personal trainer to reach a fitness goal.
What’s your investment goal?
Take a moment now to consider your own goals and what you’re working towards. Is it:
- A financially secure retirement?
- A future home?
- Supporting children or grandchildren through education and into the future?
- Building long-term financial independence?
- Leaving a legacy?
Each of these goals calls for a different approach, and a different attitude to risk. Knowing what you want to achieve is the first step toward investing with confidence.
Risk = opportunity
Risk isn’t just something to manage. It’s what gives your money the chance to grow.
Higher-risk investments like equities typically offer greater long-term returns than lower-risk options like bonds or cash. That doesn’t mean taking big chances, but finding the right balance for your goals, timeline, and comfort level.
You might be investing to travel more, feel secure later in life, or support the next generation. Whatever your ambition, accepting the right level of risk can help make it a reality.
And as your experience grows, so does your confidence. Over time, risk becomes less of a barrier and more of a powerful part of your financial toolkit.
Ready to take the first step?
Just remember, risk isn’t about diving in headfirst. Investing is about making informed choices and taking steady steps toward your goals.
Start small: Open a low-cost investment account, set up a regular contribution, read one article on investing a week, and consider working with a trusted partner.
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