Assessing Market Risk: 3 things to consider

30 May 2022

It’s important to assess the market risk before making any investment decisions. Below, ABiQ discusses what market risk is, and 3 things that you should consider before making an investment decision. 

What is market risk?

Market risk can be defined as the uncertainty associated with any investment decision. Investors often consider several sources and factors when determining market risk. Some of the factors that influence market risk  include: political environment, socioeconomic landscape, interest rates, tax rates, and more.  

Why should you assess market risk?

All investments carry risks. Assessing market risk before an investment is important. Ensuring you undertake a full market risk assessment helps you to reduce any risks associated with the investment. When looking to enter into an unknown market, the best thing that you could do is to assess the risks of the market in question. This will give you an indication of whether or not this is the correct investment for you.

​​What are 3 key factors to consider in terms of market risk?

Is my data correct? Are my sources verified?

Verified data is key to making profitable investment decisions. It’s impossible to invest in a market when you do not have accurate, verifiable information at hand. 

At ABiQ, We spend time researching by using a wide range of different sources and platforms to gather our data. Our research team meticulously validates and cleans-up our data through a variety of ways including site visits, calls and other third-party services such as the chamber of commerce and credit bureau. This ensures the data we provide is trusted and reputable.

How long am I willing to invest in this market?

How long are you willing to invest in a specific market? An investor should always decide how long they want to invest before going into any investment. If an investor has a long-term horizon, it’s more likely that they can ride out any market corrections.

What level of risk am I willing to accept as manageable or worthwhile for an investment?

The level of risk an investor is willing to take is solely determined by the individual or business, and will be unique to every circumstance. The level of risk associated with an investment generally correlates with the level of return the investment may achieve. An investor, therefore, would generally take on a risky investment and potentially lose money should the long-term reward be worth the risk of the investment.

At ABiQ, we provide validated data and trusted business intelligence covering Africa and the Middle East. We use our unique forecasting and project tracking tool to track projects worth over $5.7 Trillion in UAE, Saudi Arabia, and 54 countries across Africa so that you can stay ahead of your competitors and grow your business. Contact us today for trusted data that is meticulously validated.

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