investment risk
/ɪnˈvɛst.mənt ˈrɪsk/ · in·vest·ment risk
noun
- The possibility of losing some or all of the principal amount invested, or not gaining the expected return on investment The investor carefully considered the investment risk before putting her money into the stock market.
- A type of risk that is inherent in any investment, including market risk, credit risk, and liquidity risk The financial analyst assessed the investment risk of the portfolio and recommended diversification to minimize potential losses.
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Did you know? The concept of investment risk has been a major concern for investors throughout history, with the first recorded instances of investment risk management dating back to ancient Greece and Rome, where investors would often diversify their portfolios to minimize potential losses. The modern concept of investment risk, however, began to take shape in the 20th century with the development of modern portfolio theory.