Investment risk refers to the potential for an investor to experience losses or reduced returns on their investments. It encompasses various types of risk that can affect the performance of financial assets, including market risk, credit risk, liquidity risk, and operational risk. Market risk is associated with fluctuations in the overall market or economy that can impact asset values. Credit risk arises from the possibility that a borrower may default on their obligations, affecting the performance of fixed-income securities. Liquidity risk pertains to the difficulty an investor may face in buying or selling assets without significantly affecting their price. Operational risk is the risk of loss resulting from inadequate or failed internal processes, systems, or external events.
Investors assess investment risk to make informed decisions about their portfolios, balancing potential returns against the level of risk they are willing to accept. Understanding investment risk is essential for achieving financial goals and managing portfolios effectively within the context of an investor’s risk tolerance and investment strategy.
Market Analysis of Archer Aviation's Recent Stock Performance Shares of Archer Aviation (ACHR) experienced a substantial decline after financial giant JPMorgan Chase revised its rating on the stock. The downgrade…