Any type of investment involves certain risks and in this respect, the Genesis Vision platform is no exception. However, this is not a good reason to completely abandon the profitable ways of investing and trust your funds only to banks. So how can you reduce the possible investment risks? Let’s talk about it.
Yes, this might sound obvious and maybe even redundant, but it is sound advice. Just like we've covered previously, there are a lot of ways to analyze the performance of the investment program. Even if you pay attention only to the most basic factors like the age of the investment program, maximum profit, and drawdown; you still increase your level of success and reduce risks. Learning to utilize more complex indicators will also be beneficial.
By entrusting all your GVT to one manager, you're put all of your eggs in one basket. This, in turn, multiplies your risk. A manager with a good yield still can't give a 100% guarantee of the safety of money that was invested. It is better to choose *several managers and distribute your funds among them accordingly. It is also better to collate your portfolio out of managers with different trading strategies since it also reduces their collective risk.
Although you do not personally trade when you're investing in an investment program, you should regularly monitor the trading results of managers. Monitor the investment programs in which you have invested and withdraw money if you notice a significant increase in the risk. How can you determine that a specific manager in the near future can completely lose your money? In simple terms, you choose the maximum allowable drawdown threshold, which is the amount that you can afford to lose. As soon as losses reach this level, you can withdraw. An individual threshold varies depending on different investors perspectives, but the average value is usually 30% of the amount invested.
The starting point of an investment is very important. It is never a good idea to enter during a peak of profitability, so always take a look at the profit chart - a graphic representation often provides a better picture. When anything sees a continuous rise, it has to face a retrace later on and this should always be seen as natural. If you want to learn how to use drawdowns to your advantage, make sure to read this article.
Since the GV Funds don’t require active participation from the manager - the risk of making a human mistake is virtually zero. On the contrary to investment programs, GV Funds provide profit due to the growth of assets that are within the fund. It does not mean that the funds have no risk at all, that is absolutely not true. But both profits and risks are much more conservative in comparison to investment programs.
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