Risk Capital
Definition of 'Risk Capital'Investment funds allocated to speculative activity. Risk capital refers to funds used for high-risk, high-reward investments such as junior mining or emerging biotechnology stocks. Such capital can either earn spectacular returns over a period of time, or may dwindle to a fraction of the initial amount invested if several ventures prove unsuccessful. Diversification is key for successful investment of risk capital. In the context of venture capital, risk capital may also refer to funds invested in a promising start-up. |
|
Investopedia explains 'Risk Capital'The more risk averse the investor, the lower the proportion of risk capital allocated in the total portfolio should be. While young investors, because of their lengthy investment horizons, can have a very significant proportion of risk capital in their portfolios, retirees may not be comfortable with a high proportion of risk capital. |
Related Definitions
Articles Of Interest
-
An Introduction To Small Cap Stocks
When it comes to a company's size, bigger isn't always better for investors. Find out more here. -
What Is Your Risk Tolerance?
Forget the cliches and uncover how much volatility you can really stand. -
Making It Big On Wall Street
Read about some of the most glamorous Wall Street jobs and what it takes to land one. -
Quants: The Rocket Scientists Of Wall Street
Blend math, finance and computer skills to command a high - and well deserved - salary. -
Uncovering Oil And Gas Futures
Find out how to stay on top of data reports that could cause volatility in oil and gas markets. -
7 Unconventional Ways Businesses Can Borrow Money
Find out how your business can get the money it needs - even when the bank says "no". -
Trading Is Timing
Learn how to make gains even if you don't get in at the right time. -
Build A Baby Berkshire
Get a piece of Warren Buffett's profit by using Form 13F to coattail his picks. -
Leading Economic Indicators Predict Market Trends
Leading indicators help investors to predict and react to where the market is headed. -
How To Profit From Risk
CDs may look safe and attractive but considering most pay a rate that is less than the rate of inflation seniors today risk actually losing money with CDs. We need to be our own money managers ...
Free Annual Reports