Strategically navigating the realm of investment to foster wealth growth involves a critical balance between risk and potential rewards, customized to align with your individual financial landscape. Herein, we offer insights into various investment risks that merit consideration.

The path to investment is marked by a deliberate assessment of potential risks juxtaposed against expected returns. A fundamental element of adept wealth management is the recognition and comprehension of these potential risks. In this context, we delineate common investment risks that could impact your financial objectives and detail how Peterson Capital Group skillfully addresses these challenges to ensure comprehensive risk management.

Market Risk

The equity and bond markets are inherently volatile, with fluctuations potentially resulting in the diminution of capital. Being cognizant of market volatility is crucial, especially if there's concern over short-term price movements. This risk becomes more significant if there's a need to access your investments shortly. Conversely, if you're not in immediate need of your funds, embracing this risk could lead to greater long-term returns.

Currency Risk

Our methodology in developing globally diversified portfolios necessitates an understanding that unfavorable currency shifts could result in losses when measured against your base currency. Integrating both domestic and international investments, denominated in different currencies, into your portfolio can effectively mitigate this risk.

Liquidity Risk

For tradable investments such as ETFs, the ability to sell is dependent on the prevailing market liquidity. Disruptions in the liquidity of the ETFs' underlying assets or the ETF itself can lead to expanded bid/ask spreads and significant financial losses.

In charting the investment landscape, understanding the equilibrium between potential risks and expected gains is paramount. At Peterson Capital Group, we give precedence to grasping these risks and are committed to instituting all-encompassing risk management strategies.
Peterson Capital Group - Liquidity Risk

Inflation Risk

If your investment portfolio's returns don't keep pace with inflation, the real value of your assets will erode, diminishing their purchasing power. This underscores the importance of considering elevated risks with funds that are not earmarked for immediate use.

Taxation Risk

Awareness of how taxation impacts your portfolio's returns is vital. Gains may be subject to taxes, and losses may not be deductible. Engaging a tax professional is recommended to thoroughly understand the associated risks.

Political Risk

Political risk refers to the potential for an investment's performance to be negatively influenced by political developments. This encompasses a range of scenarios including political turmoil, sudden governmental shifts, unforeseen election results, military conflicts, and the introduction of new laws or regulations.

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