Series 82: 3.4.3. Types Of Investment Risk

3.4.3.  Types of Investment Risk

Risk is a critical factor when assessing the performance of a security and the construction of a portfolio. In the context of investing, risk is defined as the volatility in the returns of a security or a portfolio. When volatility is high, returns can vary from high to low, so investors expose themselves to the possibility of bigger losses and bigger gains.