Definition of downside
- the downside of fame
He could find no downside to the car.
the downside of living in the country is, of course, the long commute to work
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Downside refers to an investment's potential loss in value.
Let's pretend you purchase 100 shares of Company XYZ at $5 per share, for a total investment of $500. If the shares subsequently fall to $1 per share, your downside equals ($5-$1 = $4) per share, or $400.
The reverse is true for people who short stocks: For them, upside comes when the stock price falls.
Downside is the fundamental motive for avoiding any investment. The size of the downside, of course, varies with the investment -- and with the risk associated with that investment. Higher-risk investments generally have more downside (but they have more upside, too); low-risk investments generally have less downside and are thus primarily concerned with preserving the value of the original investment.
What made you want to look up downside? Please tell us where you read or heard it (including the quote, if possible).
to lessen the seriousness or strength of
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