Now there are more risk involved in investing your money to something than just the risk of losing the value. Here is a quick update of those.

The price or the value risk: This is the risk that everyone is familiar with. Price risk is the chance that the security you invested can loss some value in future or become cheaper so that you may not profit when you sell that. Value risk change with securities and thus it is possible to choose the right securities for the expected return. For example stocks of big companies have low risk and return than small cap stocks which have high risk and return. Today investors can find a lots of indicators and resources to know the risk and return associated with different securities.

The company/industry risk: Stock of companies with good fundamentals can be less risky than others. The company and industry performance affects the prices of securities related to it. For example a poor earnings report or growth prediction can significantly lower a company share price. And if that company is leader of an industry then it can affect the price of shares of all companies of the industry. So be careful with your selection.

The liquidity risk: securities which easily be converted to real money is less risky than others. But some securities like real-estate investments, some very low traded stocks, and many other investments are not so convertible. Investing in the securities with optimum or minimum liquidity is the key to reduce this risk. A trader or investor should completely avoid illiquid securities and markets if he has not much experience and resources.

The inflation risk: inflation is a common economic phenomenon where the investments loss the value with time. This is a risk which is very difficult to overcome personally, but he effect can be minimized by diversifying portfolio, timely reorganization of investments, careful selection of products and markets and with proper timing.

The market risk: the overall market or industry performance affects the performance of individual investments or securities. For example it will be very hard for a stock with good fundamentals to rise when the market is falling. But diversification of investments to different market can help the trader, as ones loss can be reduced by other’s gain. Proper analysis and market timing are also important.

The political risk: policy changes by governments, changes in relationships among economies and governing bodies can positively or negatively affect a security price. Often these changes are very sudden and are thus hard to master.

NobleTrading is an online trading broker offering direct access to US and Canadian markets. NobleTrading now allows traders to suggest their own commission plan. Find more interesting stuff on their online trading blog.