The Unpredictability of Investing

It’s easy to judge an investment in hindsight. What’s hard to do is to predict what will happen with an investment when you purchase it. If it’s stock, who knows how the company will perform over the long run? Will it’s products or services remain relevant? Will ownership continue to innovate? If you have invested in property (i.e. land or a building), will the improvements you make upon it work out? If you plan on renting it out, the rental market in the area remain strong or end up weak? These are unpredictable things that create risk with every investment. Yes, you can do your homework and due diligence, but that won’t bring forth future events and turns that just can’t be predicted. Research and trends might tell you how things will go for a few years, they may not be able to turn up how things will be decades down the road. That’s why I want to remind you that there is risk with every investment and that will never change. While there are steps you can take to minimize that risk–and certainly doing your homework helps a ton–you won’t be able to remove all the risk. Thus, it’s important that you know that and choose investments that fit your appetite for risk and that you thoroughly research your investments before making them. You won’t be happy with every investment, but that’s just how it goes sometimes. If you need help with making investments or want to discuss your appetite for risk, you should speak with a certified financial planner.