What is the risk relating to investments made outside of one's own country?

The risk associated with investments made outside of one's own country is referred to as Foreign Investment Risk. This type of risk encompasses several factors that can affect the potential return on investments in foreign markets. These may include exchange rate fluctuations, political instability, and differing economic conditions or regulations between countries.

Investing internationally often involves additional layers of uncertainty that investors must consider, such as currency risk—where changes in the value of foreign currencies can impact investment returns when converting back to one's home currency. Additionally, there might be regional economic issues, changes in foreign government policy, or different regulatory environments that can affect the performance of investments.

Understanding Foreign Investment Risk is crucial for investors who are looking to diversify their portfolios internationally, as it helps them assess and manage the unique challenges associated with cross-border investments.