Investing in stocks comes with a level of risk and in some cases, you can lose more than initial investment. It’s therefore important to develop a clear investment plan before you start investing, to help mitigate any risks. Here’s a few things to consider:

Identifying both your short-term and long-term goals can help guide the total amount you want to invest in Microsoft shares, and the length of time you’re looking to hold them before selling and hopefully taking profit.

Buying Microsoft stock outright is likely to generate higher returns than leaving it in a savings account where growth is often capped by low interest rates.

To get the most out of this investment, it’s recommended that you hold the stock for at least a decade to give it enough time to recover from any short-term market dips. If you need the money before then, it’s worth considering safer options such as government-backed bonds and high interest savings accounts. If you are still looking to invest, it’s recommended you opt for lower risk investments.

Microsoft is considered a medium-risk investment. As with all tech stocks, its share price can be volatile, but because Microsoft is a mature stock, its price movements are much less unpredictable than most newer stocks.

Its product offering is also well established, and the company has built up a strong customer base who continues to buy Microsoft products. Two of its main offerings, Office 365 and Azure cloud services are subscription-based, and provide a consistent stream of revenue. This helps protect the stock company from market volatility, making it a lower risk investment.

Financial markets can be volatile, and there’s always the possibility that you could lose your initial investment. To help prevent this, it’s important to develop a risk management strategy before investing in Microsoft shares.

Here are some ways you could mitigate this risk:

• Hold Microsoft stock at least 10 years to benefit from its long-term growth potential 
• Spread your investments across different asset classes and industries 
• Stay up to date with geopolitical events and market trends that could impact performance