investment-risks

Vocabulary Word

Definition

'Investment risks' refer to the chance of losing money on an investment. It's like betting on a horse race, where the potential for gain is often accompanied by a risk of loss.

Examples in Different Contexts

In Portfolio Diversification, 'investment risks' are spread across different types of investments to minimize the impact of any one investment's poor performance. A portfolio manager might explain, 'Diversifying your investments helps mitigate investment risks and stabilize returns over time.'

Practice Scenarios

Business

Scenario:

We have a novel business proposition at hand, but it requires significant capital. We need to evaluate whether the projected returns justify the associated risks.

Response:

I agree, assessing investment risks is crucial before we commit to this project.

Creative

Scenario:

Launching a new fashion line is an exciting opportunity, but the market reactions can be unpredictable. We need to balance the creative vision and financial practicality.

Response:

Agreed. While adventurous, we must be conscientious of the potential investment risks.