How to face the investment risk?

Investment risk is the expectation loss of our investment.

It is difficult to calculate the probability of loss sometimes, but we can assume that the loss have happened, then try to find out the reason of loss.

Before investing, we can try to answer the following two questions:

1.What cause the price of properties fall 50%?

• Liquidity risk

• Credit risk

2.How will you do if the price fell 50%?

How to categorize our invest money?

I think sleep peacefully at in night is the most important thing when we do the investment. I don’t need to worry about that I can’t pay my next monthly rent for the apartment after investing.

I believe that to avoid wake up at midnight is categorize our money. We can divide our cash into four categories.

The first category is called daily cash, it used to pay our daily cost. Apparently this type of money can not be invested to high risk stocks, or we might wake up at midnight.

Futures learning notes 001

Futures

Futures are derivate financial contract that obligate the parties to transact an asset at a predetermined future date and price.

The buyer must purchase or the seller must sell the underlying asset at the set price, regardless of the current market price at the expiration date.

futures can exchange in Shanghai Futures Exchange

Shanghai Futures Exchange can exchange follow futures:

Copper, Copper(BC), Lead, Zinc, Aluminium, Nickel, Tin

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