The first step to invest and succeed, is to know oneself, key in the real world, and as it could not be less important in personal finances, depending on the risk you are willing to take, so will be your profit.
In this sense, one of the most important questions before embarking on this adventure is to determine what the risk profile will be where we will feel most comfortable. Usually we classify risk profiles into three categories: conservative, moderate and risky or aggressive.
To help you think about your attitude towards risk when investing, we will start from your own circumstances and objectives. This is how we classify the different risk-return profiles.
Conservative: for those investors for whom conserving your capital and liquidity is a priority. They may have little investment experience but accept that assuming some risk may be necessary to obtain good returns, visibly higher than those available in products such as cash or time deposits.
Moderate: for those investors who value the opportunity to obtain attractive yields but who they do not want to expose their capital in assets that offer a high risk, like equities. Their investment experience is moderate and they are aware that the value of the capital invested may fluctuate. This type of investor does not have an immediate need to recover their liquidity and understands that the highest return occurs in the medium to long term.
Risky: It is typical of people with extensive investment experience and who also have fun and are interested. This investor profile is willing to risk a large part of their capital in assets that pose a high risk, with the objective of obtaining palpably higher returns to the inflation of the currency in which they invest. They understand that a high-risk portfolio may involve significant fluctuations in invested capital; At the same time, there is a blockage of liquidity in the short term and the investment horizon can exceed 5 years.
In any case, investment should not be considered as a game, in which the important thing is to participate. This is an area in which you can lose a lot of money, if the investment risk is not well calibrated.