All investments have some form of risk associated with them. In this Fact Sheet, we discuss seven of the more common types of investment risk.

Investment Risk

• The risk of permanent loss of capital

Poor-quality investments usually experience falls in their value from which they never recover. In extreme cases, their value can fall to zero.

• The risk of volatility

Investment volatility is the risk of the value of your investment moving up and down. With high-quality investments, their values should move up more than they go down. Investments that are expected to produce higher long-term returns (such as shares) tend to experience higher levels
of short-term volatility.