Editing Investment (section)

== Investment and risk ==
An investor may bear a [[Financial risk|risk]] of loss of some or all of their [[Financial capital|capital]] invested. Investment differs from [[arbitrage]], in which [[profit (accounting)|profit]] is generated without investing capital or bearing risk.

[[Saving]]s bear the (normally remote) risk that the financial provider may default.

[[Foreign currency]] savings also bear [[foreign exchange risk]]: if the currency of a savings account differs from the account holder's home currency, then there is the risk that the exchange rate between the two currencies will move unfavourably so that the value of the savings account decreases, measured in the account holder's home currency.

Even investing in tangible assets like property has its risk. And similar to most risks, property buyers can seek to mitigate any potential risk by taking out mortgage and by borrowing at a lower loan to security ratio.

In contrast with savings, investments tend to carry more risk, in the form of both a wider variety of risk factors and a greater level of uncertainty.

Industry to industry volatility is more or less of a risk depending. In [[biotechnology]], for example, investors look for big profits on companies that have small market capitalizations but can be worth hundreds of millions quite quickly.<ref>{{Cite web|last=Murphy|first=Casey|title=The Ups and Downs of Biotechnology|url=https://www.investopedia.com/articles/trading/06/biotechsector.asp|url-status=live|access-date=2021-12-15|website=Investopedia|language=en |archive-url=https://web.archive.org/web/20211102073630/https://www.investopedia.com/articles/trading/06/biotechsector.asp |archive-date=Nov 2, 2021 }}</ref> The risk is high because approximately 90% of biotechnology products researched do not make it to market due to regulations and the complex demands within pharmacology as the average prescription drug takes 10 years and US$2.5 billion worth of capital.<ref>{{Cite web|last=ltd|first=Research and Markets|title=AI-based Drug Discovery Market: Focus on Deep Learning and Machine Learning, 2020-2030|url=https://www.researchandmarkets.com/reports/5240719/ai-based-drug-discovery-market-focus-on-deep|access-date=2021-12-15|website=www.researchandmarkets.com|language=english}}</ref>