Different types of risk

Read about the types of risk that impact investing.

In investing, risk is the possibility of an investment producing a result that is different from the expected result or return. Technically, the term risk covers both higher and lower than expected returns, but most people are primarily concerned with the lower than expected aspect of risk. When it comes to specific stocks and other securities, risk is usually higher when you invest in higher volatility securities (such as stocks and other equities) and risk is typically lower when investing in lower volatility securities (such as bonds and other fixed-income securities). However, whether you’re investing in stocks or bonds or any company, there’s always going to be some kind of risk involved. Being aware of the different types of risk is an important piece of knowledge for any investor looking to have a successful investing journey.