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Understanding Investment Risk

All investments carry some level of risk, which simply means the value of your money can go up or down. Your risk appetite is how comfortable you are with this — whether you prefer lower-risk options that aim for steady but smaller returns, or higher-risk choices that may bring bigger rewards but also bigger ups and downs.

Finding the right balance is key to building an investment plan that suits you.

What is your risk appetite?

Your risk appetite reflects how comfortable you are with fluctuations in the value of your investments or pension over time. In Ireland, products are rated on a risk scale from 1 to 7, regulated by the Central Bank.

7 Point Risk Scale

Level 1Very Low Risk

Description

Minimal fluctuations. Capital protection is key.

Investor Profile

Cautious investors seeking stability.

Level 2Low Risk

Description

Slight value changes. Focus on steady returns.

Investor Profile

Conservative investors with low tolerance for loss.

Level 3Low to Moderate Risk

Description

Some volatility. Balanced approach.

Investor Profile

Investors open to modest growth with limited risk.

Level 4Moderate Risk

Description

Noticeable ups and downs. Potential for growth.

Investor Profile

Balanced investors seeking growth with some risk.

Level 5Moderate to High Risk

Description

Higher volatility. Greater return potential.

Investor Profile

Growth-focused investors comfortable with risk.

Level 6High Risk

Description

Significant fluctuations. High return potential.

Investor Profile

Experienced investors with strong risk tolerance.

Level 7Very High Risk

Description

Very volatile. Returns can vary widely.

Investor Profile

Speculative investors aiming for maximum growth.

  • The value of your investment may go down as well as up.
  • You may get back less than you invest.
  • Past performance is not a reliable guide to future performance.
  • Investments may be affected by changes in currency exchange rates.

Get In Touch

Ready to take control of your financial future? Contact us today.

Phone

+353 01 5637900

Mon–Fri 9AM–5PM

Office

Pension & Financial, The Square,
Enniskerry, Co. Wicklow, A98 PK26