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Identify what risks are involved in share investments

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Imagine that, in addition to your Kiwisaver funds, you've managed to accumulate $20,000 which you want to invest now for your retirement in 35-years' time. You've been told by one of your friends that the best way to increase your money is to invest in shares. You have found two particular shares of interest. The first Contact Energy, a power company, and the price seems quite reasonable at around $6.20 per share. In addition, the company does pay quite a large dividend every year to its share-holders. The second is the a2 Milk Company which produces and markets a special type of cows' milk. a2's share price is comparatively high at nearly $20 per share and the company doesn't pay dividends to its shareholders.

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Identify what risks are involved in share investments.

Reference no: EM132525401

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