"Risk comes from not knowing what you are doing."

What does a financial adviser do to help?

With a financial adviser you can establish your risk appetite, considering the following;

• Awareness of what you can lose
  Investments can go down as well as up, so it’s important to realise that over time you may not always be winning. If you’re aware of your limit for loss, you can start to factor this into your finances. Do you have people dependent on you? Consider these people before you make any investments.

   

• Do you have goals?
  What you chose to invest in will depend on your goals. Taking no risk at all means you may never reach your goal, so consider the form of investment you may need to make to reach what you have in mind. 
  Short-term goals, things like homes or cars are best saved for in cash.  This would require a low level of risk; however, you may not always receive the best interest on these savings and can be a prime victim of inflation.
  Long-term goals would usually require investing your money into assets with a better chance of beating inflation.  You may find that in these cases the value is more volatile, but time allows it to grow and recover from short term losses. As your long-term goal moves closer, your attitude to risk would probably adjust.  You could transfer funds to a less risky investment if you are close to the withdrawal date.
• What is your personal risk attitude?

One of the best ways to keep the risk down is to spread your money across a selection of investments. Many events can affect the investment markets, so keep an eye on current affairs and the stock markets, possibly with the help of an adviser.  It’s important to find the right level of risk for you, being too cautious could not benefit you in the long run.