At Arc Capital, we understand that the investment journey involves carefully balancing potential risks with expected gains. Our expertise in wealth management is centered on recognizing and navigating these risks to protect and grow your investments. We are committed to providing you with a strategic approach that ensures thorough risk management, so you can have confidence in your financial future.
Stock and bond markets are naturally unpredictable, with fluctuations potentially leading to capital loss. Being aware of market volatility is essential, particularly if you're concerned about short-term price changes. This risk becomes more pronounced if you need to access your investments soon. However, if you do not need your funds immediately, accepting this risk could result in better long-term returns.
Our approach to building globally diversified portfolios requires understanding that unfavorable currency movements could lead to losses when measured against your base currency. Including both local and international investments, denominated in various currencies, in your portfolio can help mitigate this risk.
For tradable investments like ETFs, the ability to sell depends on current market liquidity. Disruptions in the liquidity of the ETFs' underlying assets or the ETF itself can result in wider bid/ask spreads and significant financial losses.
If your investment portfolio's returns do not outpace inflation, the real value of your assets will decrease, reducing their purchasing power. This highlights the importance of considering higher risks for funds not needed in the near future.
Understanding how taxation affects your portfolio's returns is crucial. Gains may be taxable, and losses may not be deductible. We recommend consulting a tax professional to fully grasp the associated risks.
Geopolitical risk refers to the potential for an investment's performance to be adversely affected by political developments. This encompasses a range of scenarios including political instability, unexpected government changes, surprising election outcomes, armed conflicts, and the introduction of new laws or regulations.
