The risk appetite of an individuals differs from person to person. There are few person who are eager to take on the risk and get success in life whereas there are many individuals who knows everything but unable to take the risk. Even the investment in stocks or crypto is a risky affair. In a nutshell, risk appetite is the amount and type of uncertainty or potential loss someone is willing to accept to achieve their personal or financial goals. Taking risk is part of the life and it depends on individual choices. Risk taking is not only limited to investment but also you will find it in any sports and adventure. You may have notice that an Adventure is full of risk because it inherently involves stepping into the unknown, pushing physical / psychological limits, and encountering challenging environments. This is quite similar to risk of investment as we are unknown of the desired outcome. Yet if we take them we get too much satisfaction.
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No risk, no reward
2025 has been an eventful year. It was fruitful to many extent. While I manage to carry on what I started in 2024, but in 2025 I stepped up more on some unknown path. In 2025 I manage to create a good stocks portfolio, especially putting my entire balances into SME ipo. SME IPOs in India are Initial Public Offerings by Small and Medium Enterprises (SMEs). Applying on these IPO is risky due to higher volatility, lower liquidity (harder to sell). Also it requires to buy more quantity. This year the stock exchange board of India have increased the minimum amount of investment to 2.5 lakhs. But in case the stocks gets allotted there are chances that the shareholders could get good return. I never applied on these IPO before. But in 2025 I started trying my luck. To fund the application money, I borrowed some fund and also utilized all my balances. In fact at some occasion my bank balance came to zero. One you apply to this stick, the money get locked for a week. So it get quite crunchy and the position gets tight. It was a call plated risk I undertook. The more riskier was borrowing the fund. No one is ready to load you until you have good repo. But I succeed in getting fund for the investment. There were some SME ipo last year and after trying my luck for over few month on different companies. I managed to get some handy return on one of them. It was a mere profit of 13% but still the risk i undertook to get the same gives me good satisfaction.
Dare to be different
SME IPOs usually have a limited number of shares available. Strong investor appetite often leads to subscriptions of 100x to 400x. This immense demand drives the price up on the listing day. cashing on the opportunity and getting some good returns, I manage to payback my borrowing and also get some profits on my fund. It was a risk to get some quick profits which i steadily managed. Ever since I get success in one of the IPO, I have been trying my luck, but usually unable to get the required funding . I hope this new year bring me some luck as I am going to apply more on fundamentally strong companies. Investing in SME IPOs carries high risk.
Stepping outside our comfort zone helps us learn new skills, understand ourself better, and adapt to change. In my opinion, it is always advisable to take calculated risk. Not all risks are good, it is advisable to avoid those that harm yourself or others. The goal is "positive risk-taking," which involves thoughtful decisions that challenge us for growth, not reckless actions.
In good faith - Peace!!
Yeah actually... Calculating risk before taking it is very essential cos at the end of most of the risks been taken, it should be a positive result worthy of been taken
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Stepping outside your comfort zone is sometimes necessary, but as you say, we must do so with caution. Thank you for these reflections! Happy New Year!
The eagerness to learn is more important in life. there are so many things to learn, but many individuals are not interested in learning
Unfortunately that's how it is...