Factors That Affect Securities Risk

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Factors that affect securities risk Securities investment risk mainly has two types: one is the benefits of investors and the possibility of loss of the principal, the other is the benefits of investors and the possibility of the purchasing power of the loss of the principal. The first type of risk, in many cases is likely to be produced. The second risk mainly comes from the inflation. In inflation, although investors’ earnings and capital changeless, or has increased, but as long as in the growth of income less than the amplitude of rising prices, the benefits of investors and the purchasing power of the principal will fall and the actual inflation erodes the investors interests. Some factors will affect securities risk; include market risk, interest rate risk, investment risk, management risk, technical risk, and so on. Market risk refers to the caused by stock market changes and risks. As currently envisaged, the principal causes of market risk, there are two: one is the inner reason of the securities market, it is inevitable. The other is human factors. Interest rate risk refers to the market interest rate changes can cause the securities investment income uncertainty to sex, changes in market interest rates will cause stock price change, will affect the securities earnings certainty, brings the risk of securities investment. Securities investment funds mainly invest in stocks and bonds, therefore, the fund's investment risk including stock investment risk and bond investment risk. Stock investment risk mainly depends on the operating risk of listed companies, securities market risk and risk of economic cycle fluctuation. The management of securities investment fund risk refers to the fund operation management level of each of the parties to the risk of investors. Such as the management of the fund managers’ ability to fund earnings,

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