investment risk
Potential for loss
Investment risk is the possibility that an investment will lose value or fail to generate expected returns.
All investments carry some degree of risk, from the relative safety of government bonds to the volatility of speculative stocks or cryptocurrencies.
Investors often hear that higher potential returns come with higher risk, which is why diversifying your portfolio is standard advice.
Risk can stem from market fluctuations, economic downturns, company failures, or simply bad timing.
- diversificationExpanding into varied areas
- asset allocationDistributing investments strategically
- standard deviationSpread around the mean
- herd behaviorMimicking the group's actions
- stress testingEvaluating capacity under extreme conditions
framing effect · hedging · due diligence · flight to safety · safe haven assets · market volatility · black swan event · stake · speculation · appetite · skin in the game · high stakes · portfolio · bubble · leverage · bet · uncertainty · venture
investment riskcertainty
Total absence of doubt
guaranteed income · capital preservation · sure thing · predictability · safe haven
investment riskstability
Resistance to displacement
price stability · market stability · money market funds · equilibrium