There are general risks to which all asset classes, financial instruments and financial services are exposed to and which may lead to a financial loss. Some of these risks are:
Economic risk: The economic development moves in cyclical fluctuations. Cyclical downturns can reduce the value of your investment substantially.
Inflation risk: Money is subject to decrease in value due to inflation.
Country risk: The government of a country may exert influence on capital movements and the transferability of its currency and, thus, hindering a debtor to fulfill its obligations. If your investment includes assets affected by this risk, you might suffer a loss.
Currency risk: This is a form of risk that arises from the change in price of one currency against another. Your investment might decrease in value even though the underlying asset has not decreased in value.
Liquidity risk: Some investments may not be liquid and, thus, may not be sold ad hoc or sold only with reduction in value. If these investments must be sold on short notice, you might suffer a loss.
Cost risk: Banks, credit institutions and financial services companies charge various costs/spreads which may substantially reduce the performance of your investment over time.
Tax risk: Gains generated by investments in capital markets are subject to taxes and/or other fiscal liabilities. Changes of the law might lead to an unexpected value decrease of your investment.
Risk of leveraged investments: Leveraged investments lead to increased risks in investing. If your investment decreases in value, you might not be able to cover interest or repayment claims.
Risk of incorrect information: You may make misguided investment decisions due to missing, incomplete or incorrect information and, thus, suffer a loss.