Topic > Investment Case Study - 712

Systematic risks can usually be avoided through technical management. At the moment, most investors will place their investment in different portfolios, as they can spread the risks in different places. Some profits can offset losses that occur elsewhere, so that most people are willing to avoid investing all their money in a particular asset. On the other hand, some managers of a large company might make some mistakes while managing their business. Therefore, such errors will lead the financial performance in the market to become really bad. To avoid this situation, investors will invest in different assets as they have little chance of facing situations where all investments are lost due to bad decisions made by companies. Apart from this, there are many other systematic risks that are common to see in the market. First, the interest rate will bring the systematic risks because the interest rate directly affects the final profits on returns. Meanwhile, inflation rates are another factor that can be called systematic risk, because the inflation rate will affect the final liquidity received by investors, and the value of investment returns will be lower than the initial value. Finally, investors' expectations about the overall performance of the economy. Because if investors think that the future development of the economy does not have a positive anticipation, they will reduce the current investment, so the total investment revenue will be