Risk Disclosure

Risk Disclosure

Investing in financial instruments involves varying degrees of risk. At J. Knobel Investor Services Limited, we believe in being transparent about these risks to ensure that all clients make well-informed decisions when investing. This document outlines the primary risks associated with the services and products we offer.

By engaging in investment activities through J. Knobel Investor Services Limited and our principal firm, Mega Equity Securities and Financial Services Public Limited, you acknowledge that you have read, understood, and accepted the risks described in this disclosure.

  1. General Investment Risks

1.1 Market Risk

Market risk is the potential for financial loss due to fluctuations in the market value of securities and financial instruments. Prices can rise or fall based on various factors, including economic conditions, political events, or changes in interest rates. The value of your investments may go up or down, and you could lose part or all of your capital.

1.2 Liquidity Risk

Liquidity risk arises when an asset cannot be quickly sold or converted into cash without a significant loss in value. Some financial instruments may have limited liquidity, meaning that it could take time to find a buyer or you may need to sell at a lower price than expected.

1.3 Currency Risk

If you invest in financial instruments denominated in a currency other than your own, changes in exchange rates can affect the value of your investments. Currency fluctuations can lead to either gains or losses depending on market movements.

  1. Specific Risks Related to Financial Instruments

2.1 Equities (Stocks)

Investing in equities carries the risk that a company’s value may fluctuate due to factors such as management performance, economic changes, or competitive pressures. While equities may provide the potential for growth, they can also result in significant losses if a company underperforms or the market declines.

2.2 Bonds and Fixed-Income Instruments

Bonds are generally considered lower risk than equities but are still subject to risks such as interest rate risk and credit risk. Changes in interest rates can affect bond prices, and issuers of bonds may default, meaning they cannot meet their repayment obligations.

2.3 Exchange-Traded Funds (ETFs) and Mutual Funds

Investing in ETFs and mutual funds can reduce risk through diversification, but they are still subject to market risk, management risk, and tracking errors. Additionally, some ETFs may involve the use of leverage, which can magnify both gains and losses.

2.4 Derivatives

Derivatives, such as options or futures, can carry significant risk due to their leverage. Small movements in the price of the underlying asset can lead to significant losses. These products are typically not suitable for all investors and should only be used by those with sufficient knowledge and experience.

  1. Leverage Risk

Some financial instruments allow you to trade on margin or use leverage, meaning you can control a larger position than your actual investment. While leverage can amplify potential gains, it can also significantly increase potential losses, possibly exceeding your initial investment. Leveraged products are typically higher risk and may not be suitable for all investors.

  1. Suitability Risk

We strive to ensure that the investment products and services we recommend are suitable for your financial situation, risk tolerance, and investment objectives. However, it is your responsibility to provide accurate and complete information during the suitability assessment process. If your financial circumstances change, you should inform us immediately so we can adjust our advice accordingly.

  1. Risk of Loss of Capital

There is no guarantee of returns on any investment, and you should be prepared for the possibility that you may lose part or all of your invested capital. The value of your investments can fluctuate due to market conditions, and past performance is not a reliable indicator of future results.

  1. Regulatory Risk

Regulatory changes or shifts in government policy can impact the value of certain investments. This includes tax changes, changes to financial regulations, or restrictions imposed on specific markets or industries. It’s important to stay informed about regulatory developments in your home country and in the markets where you invest.

  1. Tax Risks

Tax treatment of your investments will depend on your individual circumstances and may change over time due to legislative changes. You are encouraged to seek independent tax advice regarding the tax implications of any investment decisions. J. Knobel Investor Services Limited does not provide tax advice and accepts no liability for any tax consequences related to your investments.

  1. Operational Risk

Operational risk arises from the possibility of system failures, human error, or external events impacting the services we provide. While J. Knobel Investor Services Limited and our principal, Mega Equity Securities and Financial Services Public Limited, maintain high standards of operational integrity, there is no absolute guarantee that our systems or processes will be error-free at all times.

  1. Risks of Non-Independent Advice

When we provide non-independent investment advice (for example, when recommending model portfolios with a limited selection of financial instruments), there is a risk that these recommendations may not fully consider the broad range of available products. Although we ensure that all advice is suitable, you may want to seek independent advice or diversify beyond the scope of our recommendations.

  1. Conflicts of Interest

There may be circumstances where conflicts of interest arise between J. Knobel Investor Services Limited, our employees, or other clients. We have established a Conflict of Interest Policy to identify, manage, and disclose any such conflicts. However, the possibility of conflicts cannot be entirely eliminated, and there may be instances where such conflicts affect the services provided.

  1. Third-Party Risks

In many cases, your investments will be held or executed by third-party providers. These providers may face operational, legal, or financial difficulties that could impact your investments. While we carefully select our partners, including Mega Equity Securities and Financial Services Public Limited, we cannot guarantee their ongoing performance or solvency.

  1. Important Considerations
  • Diversification: While diversification can reduce risk, it does not eliminate it entirely. Even a well-diversified portfolio is subject to market and specific risks.
  • Investment Horizon: The risk level of investments may change depending on your investment horizon. Short-term investors may face higher volatility compared to those with a long-term strategy.
  • Your Responsibility: It is important to review your investments regularly and ensure they continue to meet your objectives and risk tolerance.

Final Notes

Investing always involves risk, and it is essential to fully understand these risks before engaging in financial markets. J. Knobel Investor Services Limited provides personalized advice based on thorough suitability assessments; however, we cannot eliminate all investment risks. It is important that you feel comfortable with the potential for loss and only invest capital that you are prepared to lose.

For more information or to discuss any concerns you may have, please feel free to contact us at info@jknobel.com or dial +357 22258790.