Investment Risks
Investment risks refer to the potential for losing money or not achieving the expected returns on an investment. These risks can arise from various factors, including market fluctuations, economic changes, and company performance. Understanding these risks is crucial for investors to make informed decisions and manage their portfolios effectively.
Different types of investment risks include market risk, credit risk, and liquidity risk. Market risk involves the possibility of losses due to changes in market prices, while credit risk pertains to the chance that a borrower may default on a loan. Liquidity risk refers to the difficulty of selling an investment quickly without significantly affecting its price.