Risk simply denotes the probability of not getting back the full amount invested, or the possiblity of original investment declining in its value.
Deciding not to invest also carries a risk, as your money looses value due to inflation. Rs 100 today will be worth say Rs 94 or lesser after a year as Rs 6 is eaten away by inflation.
This is the risk of not acting, not investing.
As a broad rule, an inflation of 6% over 10 years will reduce the real value of money by 50% approximately.
The key to successful investment is to not avoid risk but striking a balance between Risk and Reward.
Why Fixed deposit is very risky inspite of looking safe ?
Assume you had Rs. 1 Lakh in 1980:
Rs 1 lakh in 1980 was equivalent to 15 plots of land in Bangalore in 1980.Value of those 15 plots are between 2-5 crores today.
Rs 1 lakh in 1980 in BSE sensex is now 6 crores today. So Investment of 1 lakh has become 6 crores in 2022
If that was kept that in fixed deposit, Value is Rs 42 lakhs now.
One can't buy even buy two room flat in Bangalore now for Rs 42 lakhs
The fixed deposit investor has become poor now inspite of investing in a fixed income generating asset.
Fixed deposits are good, but you should know when to use it and how much
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