5 Key Investment Risks

1) Systematic Risk — Systematic risk affects everyone— from economic downturns to geopolitical events.

When markets crash, no stock or sector is safe. Whether you're holding blue-chip stocks, ETFs, or bonds, when the market crashes, so does your portfolio. This is the type of risk that cannot be diversified away from.

2) Idiosyncratic risk — Sometimes, the market is fine but your stock isn’t. This is idiosyncratic risk. The risk of holding the wrong stock at the wrong time. Idiosyncratic risk is the danger tied to a single company or sector. Many traditional portfolios often become overly concentrated — whether by sector or a handful of popular stocks.

3) Strategy Risk — Not all strategies work in all markets. Some advisors stick to a single method — like value investing or Growth Stocks or passively buy and hold — and hope it eventually pays off. But hope is not a strategy. Every investment strategy has limitations. What works in one market cycle may fail in another.

4) Behavioral Risk — Behavioral risk stems from the human biases which lead to poor investing decisions — chasing hot stocks panic selling holding losers too long or averaging down on losing stocks. The average investor often underperforms the very funds they invest in because of emotional timing mistakes.

5) Operational Risk — Operational risk is what happens when systems fail — a platform outage a compliance mistake or a manual trading error. In passive investing, these risks often go unnoticed… until something breaks.

Conclusion: Investing isn’t about avoiding risk — it’s about managing it. Alamut Capital can help you build a portfolio that stands the test of time by brings institutional-grade risk management to individual investors. Let’s build a resilient future — together.