Is the stock market too risky?
Over the last few years many people have been asking themselves whether an investment into the stock market is a risky investment and whether other alternatives should be considered. The truth is that no investment is entirely risk-free and the amount of risk you're willing to take, the time span of your investments and your overall financial profile all need to be taken into account. This is even before you begin to look at individual investments.
In reality, an investment in the UK stock market, on the whole, is an investment in the UK economy assuming that you spread your risk of to take advantage of the overall economic situation and not overexpose yourself to an individual company or an individual sector. There will be times when certain sectors are in favour but these fashion trends tend to come and go and while you may pick the correct sector if your timing is wrong you may lose money.
Even though many investors make money in the short-term there are many investors who lose money by effectively gambling on short-term situations. The key to any investment is spreading your risk and taking a long-term approach with money which you can afford to invest and are unlikely to need in the short term. This is where professional financial advice is essential.
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