Investment Risk

Investment risk refers to the possibility that the value of an investment may decrease or not perform as expected. This can happen due to various factors, such as market fluctuations, economic changes, or the performance of the specific asset or company. Different investments carry different levels of risk; for example, stocks can be more volatile than bonds. Understanding investment risk is crucial because higher potential returns often come with higher risks. Investors must assess their risk tolerance and make informed decisions to align their investments with their financial goals.