Risks and returns
By understanding the risks involved with investing in an IG Smart Portfolio, you’ll be in a better position to make informed investment decisions.
When you make an investment, there is always the risk that it could fall in value as well as rise.
Saving cash is generally viewed as a risk-averse investment option – it offers lower potential returns than other investments, but there’s only a small chance of actually losing any money. However, if the interest rate on your savings account is lower than the prevailing rate of inflation, the real value of your savings will be less than your original deposit.
When you invest in products that aren’t cash, your capital is at far greater risk. Equities have historically delivered higher returns than cash long term, but share prices regularly fall as well as rise, and some companies fail completely.
While you’ll make an investment with the expectation of generating positive returns, you must also accept that you could end up with less money than you originally put in.