Risk
Risk in investing is the chance of a permanent loss, not the fact that a price moves around.
Price movement — volatility — is what most people mean by risk, and it is the wrong thing to fear. A price that swings 5% a week is uncomfortable but survivable. Real risk is the company being worth less forever, or you being forced to sell at the bottom.
Which means risk depends on your situation as much as on the stock. Money you need next month is at risk in anything; money you can leave alone for ten years can sit through a crash.
In Stoxhatch
Your portfolio gets a risk score from how concentrated it is and how volatile your holdings are. Nothing is locked — the score is feedback, not a rule.
Related
- Diversification — Diversification is spreading your money across different companies and industries so one bad outcome cannot sink you.
- Confidence calibration — Calibration is how well your confidence matches your accuracy — being right about 80% of the time when you say you are 80% sure.
Try it with $10,000 of simulated cash, no signup needed — or browse the rest of the glossary.