Glossary

Risk, in the context of finance and investing, refers to the uncertainty surrounding the potential outcomes of an investment. 📈📉

It is the possibility that an investment's actual returns will differ from the expected returns, which can result in either a loss or gain. Risk is inherent in all investments, but the level of risk varies depending on factors such as the asset type, market conditions, and the investor's strategy.

For example, investing in a start-up business is generally considered riskier than investing in an established, blue-chip company, as the former has a higher chance of failure.

Fun fact: In finance, there is a widely accepted principle called the risk-reward trade-off 🎢 which states that higher potential returns are typically accompanied by higher levels of risk. This means that if an investor wants to achieve greater returns, they must be willing to accept a higher level of risk.