does downside risk have long term or short term effects 
downside risk usually causes investments to lose value in the short term stock and bond markets may generate positive results over the long term but market events can cause specific investments or sectors to decline in value in the short term 1the bottom lineinvestors assume a level of risk that a security increases or decreases in value downside risk represents the worst case scenario and may be precipitated by a market or economic event that causes a decline in the security s price in the short term 