downside risk


The likelihood that a security or other investment will decline in price, or the amount of loss that could result from that potential decline.

Use downside risk in a sentence

You need to always know what the downside risk might be and do your best to avoid reaching it if you can.

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My policy is to put trailing sell orders on the stocks within my portfolio to limit the downside risk and protect profits earned to date.

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There was some slight downside risk, but on the whole the play seemed like a solid one, so we went ahead and pulled the trigger on the deal.

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2% rule upside potential