The risk of loss in trading can be substantial. You should, therefore, carefully consider whether such trading is suitable for you in light of your circumstances, investment time horizon, needs for liquidity and overall financial resources.
You should be aware of the following points:
- Past performance of any security is not indicative of future results or future performance.
- This is not a solicitation to buy or sell a security in any state.
- The price or value of an investment will depend on fluctuations in the financial markets outside of anyone’s control.
- Any investment is subject to risk.
- Hypothetical and or back-tested results are illustrative if you would have bought the security at initial period in the calculation.
- Diversification does not protect against loss in declining markets.
- There are added risks in buying and selling “Penny”, microcap and smaller capitalization companies. We do not recommend buying or selling stocks under $5.00 per share with this educational trading platform. Investing in smaller capitalization securities involves added risks.
- Exchange traded funds (ETFs) are subject to risks similar to those of stocks, such as market risk, and investors who have their funds invested in ETF’s may experience losses. Additionally, fixed income (bond) ETFs are subject to interest rate risk, which is the risk that debt securities in a portfolio will decline in value because of increases in market interest rates.
- The use of leverage by an ETF increases the risk to the fund. The more a fund invests in leveraged instruments, the more the leverage will magnify gains or losses on those investments. We do not recommend buying leveraged securities or options or other leveraged type instruments using this financial learning platform due to the inherent risks of leveraged investments.
- Capital Risk is the risk the investor will not fully recover his/her entire investment. Options and other speculative investments have a high degree of this type of risk, while quality short-term investments such as Treasury bills enjoy minimal capital risk.
- Selection Risk is the risk of choosing a security that will perform worse than other available securities.
- Liquidity Risk is the risk that, should the quality or desire of a particular investment decrease, the holder will have a difficult time selling the instrument. Thus we recommend larger capitalization securities when utilizing this financial investment learning platform.
- Market Risk is the risk that the value of a security will decline due to overall market conditions, not by any fault of the issuing company.
- Credit Risk is the risk that the issuer may become unable to pay interest and/or principal when due on fixed income securities. U.S. Government securities are the least likely to default on payments, while “junk” bonds have a high degree of credit risk.
- Country Risk refers to added risk levels involved with foreign securities including currency controls, regulatory changes, country stability factors, political factors, wars, and other issues that may arise affecting companies in that country.
- Inflationary Risk are the risks that inflation will reduce the purchasing power of a dollar over time. Equity securities tend to provide the best protection against this type of risk, while bonds are more susceptible due to their fixed income and possible long-term exposure to rises in inflation.
- Interest Rate related to the risk that, as interest rates rise, a bond investor’s holdings will decline as more attractive offerings enter the market. The longer the maturity on the bond, the greater the risk. Some stocks are susceptible to this type of risk as well (companies that borrow for financing operations will see less profit should the cost of borrowing increase; this will decrease their stock price).
- Timing Risk refers to the risk of buying or selling at an inopportune time, thus limiting profit or incurring a loss. This financial learning platform should only act as a helpful guide in your investment research process. It is your duty to fully research related companies, economic outlooks and financial markets prior to buy or selling any potential security you may trade. Often custodians offer free investment research to help bolster your decision making process to make the most informed decisions on security selection and timing of trades during an economic cycle.
- Should you decide to buy and sell securities for your own account on a non-discretionary basis, we do not recommend buying any more than 5% in any one security to avoid concentration risk. With tens of thousands of stocks to choose from we do not recommend putting any more than a maximum of 5% weighted position into any one investment as a general guideline for diversification.
- Before you trade, you should familiarize yourself with all related risks, suitability and expenses which will apply to your particular transaction.
- All equities, futures, forex and options positions involve risk. We do not recommend investing in currency, futures, forex and options related instruments using this financial learning platform since these securities have inherently much great risk and should only be used by investment professionals.
- We do not recommend trading on margin or using leverage in conjunction with this trading educational platform. The high degree of leverage that is often obtainable in futures and forex trading because of the small margin requirements can work against you as well as for you. Leverage can lead to large losses.
- WE DO NOT RECOMMEND TRADING OPTIONS, FUTURES, CURRENCIES BASED ON THIS TRADING EDUCATIONAL PLATFORM.
- You should directly consult your custodian concerning the nature of the protections available to safeguard funds or property deposited for your account.
- While risk is unavoidable, it can be managed. Diversification is one tool in managing risk in a portfolio; a balanced portfolio distributes the various types of risk over a group of securities.
THIS BRIEF STATEMENT CANNOT, OF COURSE, DISCLOSE ALL THE RISKS AND OTHER ASPECTS OF THE MARKETS SHOULD YOU HAVE ANY QUESTIONS PLEASE CONSULT YOUR FINANCIAL ADVISOR PRIOR TO MAKING A TRADE DECISION.