Business Cycle RiskCycles of growth and decline experienced by industries. | Business RiskThe risk that a business will not perform to target. |
Commodity RiskCommodity price fluctuations and supply disruptions. | Competitive RiskA business loses market share or experiences pricing pressures due to competition. |
Compliance RiskThe risk a business will violate laws, regulations or standards. | Concentration RiskA lack of diversification. |
Contagion RiskThe risk of an economic shock that spreads across countries and industries. | Counterparty RiskThe risk that a counterparty to a transaction will not fulfill their obligation to you. |
Country RiskInvestments tied to a particular country that are at risk due to political or economic problems in that country. | Credit RiskThe risk of non-payment by borrowers and customers. |
Currency RiskThe potential for exchange rate fluctuations to cause losses. | Economic RiskThe risk of an economic downturn or economic issues such as inflation. |
Environmental RiskLosses and liability related to environmental damage. | Event RiskLosses tied to a major adverse event such as a pandemic. |
Exit RiskLosses due to difficulties in selling an investment. | Falling KnifeThe risk of buying something that has downside momentum – the price may simply continue to drop. |
Fraud RiskLosses due to fraudulent activities such as embezzlement. | Geopolitical RiskThe risk of political or social instability. |
Governance RiskLosses due to poor management and insufficient oversight. | Idiosyncratic RiskHard to predict failures of a single business such as a product recall. |
Industry RiskLosses across an industry due to factors such as business cycles, commodity prices and regulations. | Inflation RiskThe risk of a sustained and broad increase in prices. |
Inherent RiskThe risk of inaccurate information such as an error or omission in a financial statement. | Interest Rate RiskLosses or relative underperformance due to changing interest rates. |
Investment Horizon RiskThe risk that you will need to use your savings earlier than expected. | Liquidity RiskThe risk that you will run out of cash or be unable to sell investments at a reasonable price due to a lack of demand. |
Management RiskPotential for losses due to mismanagement. | Market RiskLosses due to market conditions such as prices or low liquidity. |
Model RiskFailure of an investment model. | Operational RiskOperational failures of a business due to factors such as supply chain issues. |
Political RiskThe risk of political instability. | Priced For PerfectionRisks associated with a firm with a high valuation whereby the market expects very high performance from the company. |
Regulatory riskThe potential for new regulations that impact your investments. | Risk Of RuinThe risk of losing all of your capital, often due to leverage. |
Short SqueezeA lack of liquidity to cover all the investors who want to exit short positions at the same time. Potential for major losses. | Systematic riskRisks to the entire financial system or market such as a major information security attack. |
Tax riskThe risk of unexpected taxes. | Upside RiskA term for greater than expected returns. |
Value TrapAn investment with a low price for a good reason that might not be apparent to all investors. | Volatility riskThe risk of price swings. |
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