Risk Assessment in Investment

Risk assessment in investment refers to the process of evaluating potential financial losses associated with a particular investment. It involves identifying various risks, such as market volatility, economic changes, and specific asset-related risks, and analyzing how these factors could impact returns. Investors assess their own risk tolerance—how much risk they're willing to take—to make informed decisions. By understanding the risks involved, investors can develop strategies to mitigate them, diversify their portfolios, and ultimately enhance their chances of achieving their financial goals while minimizing potential losses.