[vc_row][vc_column][vc_custom_heading text=”Common types of investment risk” use_theme_fonts=”yes”][/vc_column][/vc_row][vc_row gap=”15″ equal_height=”yes” css=”.vc_custom_1584172254988{margin-top: 90px !important;}”][vc_column width=”1/2″ css=”.vc_custom_1584292291891{border-top-width: 15px !important;background-color: #f7f6f4 !important;border-top-color: #e0a94d !important;border-top-style: solid !important;border-radius: 5px !important;}”][vc_custom_heading text=”Business risk” font_container=”tag:h3|font_size:1.3rem|text_align:left” use_theme_fonts=”yes”][vc_column_text]The risk associated with the unique circumstances of a particular company as they might affect the price of the company’s securities. It can be affected by a number of issues such as changes in share prices, employee layoffs, gains or losses of contracts and changes in management.[/vc_column_text][/vc_column][vc_column width=”1/2″ css=”.vc_custom_1584292298453{border-top-width: 15px !important;background-color: #f7f6f4 !important;border-top-color: #e0a94d !important;border-top-style: solid !important;border-radius: 5px !important;}”][vc_custom_heading text=”Market/systemic risk” font_container=”tag:h3|font_size:1.3rem|text_align:left” use_theme_fonts=”yes”][vc_column_text]The day-to-day fluctuation in a stock’s price (also known as volatility). Market risk applies mainly to stocks and options. In general, stocks tend to perform well during a bull market and poorly during a bear market.[/vc_column_text][/vc_column][/vc_row][vc_row gap=”15″ equal_height=”yes” css=”.vc_custom_1585065927854{margin-top: 30px !important;}”][vc_column width=”1/2″ css=”.vc_custom_1584292291891{border-top-width: 15px !important;background-color: #f7f6f4 !important;border-top-color: #e0a94d !important;border-top-style: solid !important;border-radius: 5px !important;}”][vc_custom_heading text=”Default risk” font_container=”tag:h3|font_size:1.3rem|text_align:left” use_theme_fonts=”yes”][vc_column_text]The risk that a company or individual will be unable to pay the contractual interest or principal on its debt obligations (bonds or debentures). Government bonds, especially those issued by the federal government, have the least amount of default risk and least amount of returns. Corporate bonds tend to have the highest amount of default risk, but also have higher interest rates.[/vc_column_text][/vc_column][vc_column width=”1/2″ css=”.vc_custom_1584292298453{border-top-width: 15px !important;background-color: #f7f6f4 !important;border-top-color: #e0a94d !important;border-top-style: solid !important;border-radius: 5px !important;}”][vc_custom_heading text=”Foreign exchange or currency risk” font_container=”tag:h3|font_size:1.3rem|text_align:left” use_theme_fonts=”yes”][vc_column_text]Currency exchange rates can change the price of an investment. Foreign exchange risk applies to all financial instruments that are in a currency other than your domestic currency. There is a possibility that a profit may be negated once a profit from a foreign investment is converted to domestic currency, especially if exchange rates have changed since the investment was made.[/vc_column_text][/vc_column][/vc_row][vc_row gap=”15″ equal_height=”yes” css=”.vc_custom_1585065976951{margin-top: 30px !important;}”][vc_column width=”1/2″ css=”.vc_custom_1584292291891{border-top-width: 15px !important;background-color: #f7f6f4 !important;border-top-color: #e0a94d !important;border-top-style: solid !important;border-radius: 5px !important;}”][vc_custom_heading text=”Inflation risk” font_container=”tag:h3|font_size:1.3rem|text_align:left” use_theme_fonts=”yes”][vc_column_text]The possibility that the value of assets or income will decrease as inflation shrinks the purchasing power of a currency. Inflation causes money to decrease in value over time, and does so whether the money is invested or not.[/vc_column_text][/vc_column][vc_column width=”1/2″ css=”.vc_custom_1584292298453{border-top-width: 15px !important;background-color: #f7f6f4 !important;border-top-color: #e0a94d !important;border-top-style: solid !important;border-radius: 5px !important;}”][vc_custom_heading text=”Interest rate risk” font_container=”tag:h3|font_size:1.3rem|text_align:left” use_theme_fonts=”yes”][vc_column_text]Investments such as bonds, Guaranteed Investment Certificates and mortgage-based investments will fluctuate in value when interest rates change. When interest rates go up, the value of fixed-rate investments drop. When interest rates go down, the value of fixed-rate investments increase.[/vc_column_text][/vc_column][/vc_row][vc_row gap=”15″ equal_height=”yes” css=”.vc_custom_1585065987501{margin-top: 30px !important;}”][vc_column width=”1/2″ css=”.vc_custom_1584292291891{border-top-width: 15px !important;background-color: #f7f6f4 !important;border-top-color: #e0a94d !important;border-top-style: solid !important;border-radius: 5px !important;}”][vc_custom_heading text=”Liquidity risk” font_container=”tag:h3|font_size:1.3rem|text_align:left” use_theme_fonts=”yes”][vc_column_text]The risk coming from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize a loss.To sell the investment, you may need to accept a lower price.[/vc_column_text][/vc_column][vc_column width=”1/2″ css=”.vc_custom_1584292298453{border-top-width: 15px !important;background-color: #f7f6f4 !important;border-top-color: #e0a94d !important;border-top-style: solid !important;border-radius: 5px !important;}”][vc_custom_heading text=”Mortgage risk” font_container=”tag:h3|font_size:1.3rem|text_align:left” use_theme_fonts=”yes”][vc_column_text]The risk that the individual or company that borrows the money will fail to make timely principal and interest payments in accordance with the terms of the mortgage.[/vc_column_text][/vc_column][/vc_row][vc_row gap=”15″ equal_height=”yes” css=”.vc_custom_1585065999571{margin-top: 30px !important;}”][vc_column width=”1/2″ css=”.vc_custom_1584292291891{border-top-width: 15px !important;background-color: #f7f6f4 !important;border-top-color: #e0a94d !important;border-top-style: solid !important;border-radius: 5px !important;}”][vc_custom_heading text=”Opportunity risk” font_container=”tag:h3|font_size:1.3rem|text_align:left” use_theme_fonts=”yes”][vc_column_text]The risk that a better opportunity may present itself after an irreversible decision has been made.[/vc_column_text][/vc_column][vc_column width=”1/2″ css=”.vc_custom_1584292298453{border-top-width: 15px !important;background-color: #f7f6f4 !important;border-top-color: #e0a94d !important;border-top-style: solid !important;border-radius: 5px !important;}”][vc_custom_heading text=”Political risk” font_container=”tag:h3|font_size:1.3rem|text_align:left” use_theme_fonts=”yes”][vc_column_text]Return on an investment could suffer as a result of instability or political changes in a country. For example, the action of the United Kingdom voting to withdraw from the European Union caused the British pound to drop in value.[/vc_column_text][/vc_column][/vc_row][vc_row gap=”15″ equal_height=”yes” css=”.vc_custom_1585066013641{margin-top: 30px !important;}”][vc_column width=”1/2″ css=”.vc_custom_1584292291891{border-top-width: 15px !important;background-color: #f7f6f4 !important;border-top-color: #e0a94d !important;border-top-style: solid !important;border-radius: 5px !important;}”][vc_custom_heading text=”Unsystematic risk” font_container=”tag:h3|font_size:1.3rem|text_align:left” use_theme_fonts=”yes”][vc_column_text]Sometimes referred to as “specific risk”. Unsystematic risk affects a very small number of assets. An example is news that affects a specific stock such as a sudden employee strike.[/vc_column_text][vc_empty_space height=”80px”][/vc_column][vc_column width=”1/2″ css=”.vc_custom_1584292972135{border-top-width: 15px !important;}”][/vc_column][/vc_row][vc_row equal_height=”yes” content_placement=”middle” css=”.vc_custom_1584293050611{margin-top: 90px !important;margin-bottom: 145px !important;}”][vc_column width=”7/12″ css=”.vc_custom_1585066082216{margin-right: 40px !important;}”][vc_custom_heading text=”Want to learn more about investing and its risks?” use_theme_fonts=”yes”][vc_column_text]If you would like to learn more about investing and the associated risks visit our resources section for useful fact sheets, videos, and tools as well as our Investing 101 classes that can help guide you in the right direction along your financial journey.[/vc_column_text][vc_btn title=”Resources” style=”custom” custom_text=”#e0a94d” i_align=”right” i_icon_fontawesome=”” add_icon=”true” link=”url:https%3A%2F%2Fcheckfirst.ca%2Fresources%2F|title:Resources||”][/vc_column][vc_column width=”5/12″][vc_single_image image=”722″ img_size=”large” alignment=”center” style=”vc_box_circle_2″][/vc_column][/vc_row][vc_row][vc_column width=”1/3″][/vc_column][vc_column width=”1/3″][vc_btn title=”Subscribe to CheckFirst blogs and investor information” style=”custom” custom_background=”#e0a94d” custom_text=”#ffffff” shape=”round” link=”url:https%3A%2F%2Fcheckfirst.ca%2Femailsubscribe%2F|||”][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]
