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​Learn about the world of investing with these easy-to-follow videos

What risks are involved in investing?

You could lose everything if you invest in one share and that company goes bankrupt.​

Diversify with exchange-traded funds (ETFs)

You can manage this risk by not putting all your eggs in one basket. You can diversify by buying into many different shares. An easy way to do this is to invest in something like an ETF. An ETF is essentially a basket of shares. You buy the basket and get anywhere from 10 to 600 different shares in that basket, reducing the amount you would lose if one company were to go bankrupt.

It is important to remember that, while an individual company can go bankrupt, the shares can go up several times, which more than compensates for this risk. You could lose 100% in a losing share, but you could make hundreds of per cent in a winning share.​​​

Want to invest tax free?
Contact a JSE-registered stockbroker and start investing tax free today!

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