Investment Risk. What Is It?
Tap below to watch our short video about investment risk, and keep reading on for more details.
Risk. Sometimes we shy away from it; other times, we are willing to face it head-on. Yet here’s the hard truth: even the most risk-averse people take risks every day. There are more obvious, routine risks in driving a car, crossing the road, or tasting new foods. Then there are the bigger, riskier decisions, such as choosing a degree course, pursuing a certain career, buying a house or starting a family.
Likewise, any type of investment has some degree of risk to it.
In terms of investing, risk refers to the degree of uncertainty and potential financial losses that go with an investment decision.
More specifically, investment risk means the probability that the actual return on an investment will be different than the expected return. This includes the possibility that the investment will lose its value.
Tap Next to find out the meaning of actual and expected returns in investment risk management.