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CFDs and forex (FX) are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading CFDs with this provider.
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CFDs and forex (FX) are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX, or any of our other products work and whether you can afford to take the high risk of losing your money. Losses can exceed deposits on some products.
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What Is Risk

Education
Saxo Be Invested

Saxo Group

What does risk mean to you? 

If you’re like us, you think of risk as the likelihood of something going wrong. If we stay home, not much can or will happen. But, if we go on vacation, we could get in a car accident, we could get lost or the vacation could cost more than planned, eating into our rent budget. On the other hand, there’s a definite upside to going on vacation. We’ll escape the routine and boredom of homelife and have a fun and memorable experience.  

What about investment risk? 

You’re probably most worried about the price of an investment you buy going down. You’re thinking, “Look, I just don’t want to lose money.” You might even be worried about an investment you didn’t buy going up by more than the investment you did buy. These are both good ways to think about risk, but there’s more to it. 

Investment risk is all about changes in prices 

When we talk about investment risk, we are talking about the likelihood of the price of an asset changing and by how much it could change. Price declines and losing money are definitely more painful, but investment risk (just like vacation risk) is really about change in either direction. The riskier an asset, the more likely the price will change and the larger the price change is likely to be. 

Assets that are the most likely to go up in price are also the assets that are most likely to go down in price. Cash and cash like investments are relatively risk free. Bonds have more risk. Stocks are even riskier. 

Uncertainty also plays a role 

We also talk about uncertainty when it comes to investment risk. Very few investments are truly risk free. Every investment has a number of possible outcomes. The larger the range of outcomes and the more uncertain the likelihood of an outcome, the larger the risk. As investors, we are basically trying to predict the future. The more likely our prediction has errors, the more uncertain it is and the higher the risk is. 

At some point your investments will go down…by A LOT! 

Make sure you are mentally prepared for this. Whether we are talking about individual assets or markets as a whole, there are times when price drops will be extreme. That’s just the way markets work. You are better off creating a plan for how to react to these markets drops now than you will be when it is actually happening. 

Quarterly Outlook

01 /

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    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
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  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

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  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
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  • FX Outlook: USD in limbo amid political and policy jitters

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    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
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  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

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  • FX: Risk-on currencies to surge against havens

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    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
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  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
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  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
    Read full article
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
    Read full article
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
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