In the capital market, in particular in investments, profit directly depends on risks. The higher the risk level, the greater the expected profit and, vice versa, respectively. Overstating the risks in the pursuit of profit, you can lose control of the investment portfolio and receive economic loss. Managing risks, we pursue one of our main principles when working with our partners - the preservation and increase of capital.
Attention! Independent activity in the capital market (stock market), namely trading in securities is fraught with financial risks and is not suitable for all investors. Starting to work in capital markets (stock markets), make sure that you are aware of the risks that trading with capital involves and that you have an adequate level of training.
Financial risks are the risks of potential damage arising from the implementation of financial transactions in connection with the possible adverse effect on them of a number of market factors. The following types of financial risks exist:
- Currency risk. If the currency in which the main costs are incurred and the investment currency does not match, the purchasing power will change depending on changes in exchange rates;
- Interest rate risk. A change in the refinancing rate of the Central Bank of the Republic of Uzbekistan may have an unforeseen effect on the exchange rate of fixed income bonds, and indirectly on share prices;
- Liquidity risk is the risk of financial losses in the sale of securities associated with the difficulty of selling them at an affordable price, for example, with the rapid withdrawal of funds from the stock market;
- Price risk is the risk of an unexpected change in the price of securities, which can lead to a fall in the value of the portfolio and, as a result, a decrease in profitability or even direct losses. The execution of an order to conclude a transaction in the securities market is not always possible under the conditions specified therein due to the dynamic change in the parameters of such transactions in trading systems, primarily due to price volatility;
- The risk of the issuer's bankruptcy is the risk associated with the possibility of the issuer's insolvency of a security, which will lead to a sharp drop in the price of this security (equity securities) or the inability to repay it (debt securities);
- The risk of unlawful actions in relation to the property of the investor and the rights of the investor protected by law from third parties, including the issuer, registrar, other persons making up the capital market infrastructure;
- Technical risk is the risk associated with the possibility of losses resulting from poor-quality or unfair performance of obligations by stock market participants or settlement banks. Portfolio Investments LLC customers are given the opportunity to minimize this risk. Portfolio Investments LLC takes all measures to protect the Client from this risk from the moment the order is received until the transaction is completed. Nevertheless, the Client independently bears all possible adverse consequences of such a transaction, which may be manifested in delays in re-registration of rights to securities, delays in payment, refusal of the counterparty to comply with the terms of the transaction without a reason acceptable by the terms of the contract, as well as other reasons;
- When the Client sends orders (applications) to Portfolio Investments LLC, there is a risk of not accepting orders (applications) for execution or a risk of non-execution of orders (applications) due to the impossibility of registering or restricting the registration of Portfolio Investments clients' applications by the auction organizer in connection with the actions of third parties persons, including the actions of clients of Portfolio Investments LLC, to submit applications to the trading system;
- In transactions with securities, it may be necessary to change the structure of the portfolio of securities by selling some assets and acquiring others, which requires the sale of existing assets and release of funds. In the interval from the moment of release of funds to the moment of acquisition of new assets, the Client may suffer certain loss of profit or even direct losses due to adverse changes in the price of a security, refinancing rate, currency exchange rate, etc;
- Operations with securities refer to operations with limited liability, that is, the extent of the Client's liability for losses is limited to the amount allocated by the Client for operations with securities. However, such a loss under certain circumstances may occur after a relatively short time.
In light of the above, you should carefully consider whether these transactions and possible losses are acceptable to you in the light of your financial capabilities.
All of the above is not intended to force you to abandon operations in the stock market, but merely aims to help you understand the risks associated with these operations, determine their acceptability, evaluate your financial goals and opportunities and responsibly approach the issue of choosing the appropriate investment strategy, as well as software for operations in the stock market.