There are general risks associated with all investments, and no investment approach can guarantee positive investment outcomes or protect capital. Financial markets are prone to fluctuations caused by economic, political, regulatory, technological, and global events.
The prices of financial instruments may fluctuate unpredictably, sometimes rapidly and substantially. Even conservative investment approaches may result in losses under adverse market conditions. WealthAxis Advisory FZ-LLC (“WealthAxis”) cannot control market movements or external events.
Investment outcomes are inherently uncertain, and risk exposure differs among asset classes, instruments, and approaches. There is no guarantee that investment performance will remain stable. Assuming investment risk is a precondition to participation.
Market volatility is the measure of variability in asset prices over time and can cause sudden and extreme changes in asset prices. Market volatility can be caused by the release of economic data, interest rate changes, geopolitical events, or market sentiment.
Markets that are highly volatile can affect market liquidity, execution, and pricing. Sudden changes in asset prices can cause losses that are beyond market expectations. Market volatility can continue for a long period of time.
WealthAxis does not provide any guarantee against losses caused by market volatility. Investors should be ready for both short-term and long-term market fluctuations. Market volatility risk cannot be mitigated.
Liquidity risk occurs when an investment is not easily bought or sold at a fair market price because of a lack of market activity. Some investments may have limited market activity or restricted exit points.
Liquidity risk can lead to forced sales at unfavorable prices or extended holding periods. In times of stressed market conditions, liquidity risk can be severely affected.
WealthAxis does not provide any guarantees regarding the liquidity of an investment. Investors may not be able to access their funds when required. Liquidity risk can impact the accuracy of valuations and increase losses.
Credit risk is the risk of the issuer, borrower, or counterparty defaulting on their financial or contractual obligations. Defaults, credit degradation, or downgrades may lead to a partial or full loss of investment value. Counterparty risk involves the risk of failure of intermediaries, custodians, clearing houses, or other service providers. Financial distress, insolvency, or business failures of third parties may have a negative impact on results. WealthAxis does not control or guarantee the financial condition or performance of third parties. The risk exposure profile differs depending on the instruments, structures, and counterparties. Credit events may occur unexpectedly, and recovery, if any, may be uncertain, delayed, or incomplete. Due diligence does not eliminate credit or counterparty risk.
Investments can be significantly impacted by changes in laws, regulations, regulatory views, or enforcement policies. Regulations can limit engagement, introduce new compliance burdens, create new market dynamics, or impact the value of specific financial instruments. Legal or regulatory ambiguity can negatively affect the value, liquidity, or enforceability of assets. In certain countries, regulations can be applied retroactively. WealthAxis does not have any ability to forecast future regulatory trends or legal interpretations. Investors are responsible for compliance with applicable regulatory requirements. Legal and regulatory risks can differ by country.
Foreign currency investments are exposed to exchange rate risks. Exchange rate fluctuations can increase or reduce investment values irrespective of the underlying investment performance. Exchange rate risks can result from changes in interest rates, inflation differentials, monetary policies, or geopolitical events. Hedging techniques, if applied, may not completely eliminate exchange rate risks. WealthAxis does not provide any assurance against negative exchange rate risks. Currency controls, restrictions, or repatriation of funds may impact fund transfers. Foreign exchange markets can be highly volatile, especially during times of global turmoil. Investment losses can occur solely because of exchange rate fluctuations.
Interest rate changes can have a substantial impact on the value of financial instruments, especially fixed income instruments. An increase in interest rates tends to decrease the market value of outstanding debt instruments, and a decrease in interest rates tends to have the reverse effect. Interest rate changes can also impact the value of equities, borrowing rates, and overall market conditions. Interest rate environments are substantially influenced by central bank policies and macroeconomic conditions. The WealthAxis system does not forecast or influence interest rate changes. The sensitivity of financial instruments to interest rate changes varies depending on the type of instrument, term, and structure. Unusual changes in interest rates can lead to market turbulence. Interest rate risk can impact both income and principal value over the investment term.
Inflation risk is the risk of a loss of purchasing power due to rising prices. If the returns on investments do not beat inflation, there may be a real loss. The rate of inflation may fluctuate unpredictably and may rise in some economic conditions. Some investments may perform poorly in a high inflationary environment. WealthAxis does not provide any guarantee of real returns. Inflation can affect interest rates, exchange rates, and prices of assets.
Concentration risk occurs when there is a focus of investments in a particular asset, industry, geographic area, security, or strategy. This lack of diversification could potentially increase losses due to unfavorable events. Concentration of portfolios could potentially lead to increased volatility and drawdowns. WealthAxis does not require diversification unless agreed to in the contract. Investors who choose to focus their investments are aware of the increased risk exposure. Sector or regional events could have a significant impact. Geographic focus could potentially increase political, regulatory, or economic risks. Concentration could potentially limit the potential for recovery. Diversification does not lead to profits but can potentially decrease risk.
Operational risk encompasses the possibility of failure or deficiency in internal processes, systems, technology, human resources, or external events. Technology disruptions, cyber-attacks, data breaches, or infrastructure breakdowns can impact service delivery or market access. Mistakes or delays can happen despite existing controls. WealthAxis adopts prudent measures but cannot completely avoid operational risk. Third-party service providers can also suffer from failures or disruptions. Business continuity events can cause operational disruptions. Data integrity or availability can be temporarily affected. Operational events can cause delays, mistakes, or losses, and there may not be immediate recovery. Operational risk is always present in all financial transactions.
There are inherent limitations and uncertainties associated with analytical models, forecasts, projections, and assumptions. The models are based on past data and assumptions that may not hold true in the future market environment. There could be errors in data input, models, and interpretations. Models are not predictors of future performance. Models are analytical tools and not predictors of future performance. Models are not guarantees of future results. Models are not suitable for all market conditions. Overdependence on models could result in increased risk exposure. Assumptions are subject to change without notice. Model risk cannot be completely eliminated.
Extraordinary events, such as but not limited to natural disasters, pandemics, wars, terrorism, cyber attacks, political instabilities, or systemic breakdowns, could affect financial markets and business. These events are unforeseen and cannot be reasonably controlled. Market closures, trading halts, or liquidity issues could arise. The valuation and trading process could be significantly impacted. WealthAxis shall not be liable for any loss caused by force majeure or extraordinary events. The recovery period could be unclear. These events could simultaneously affect global markets. Insurance, if available, may not necessarily cover all losses. These events cannot be mitigated by preparation and planning.
There is no guarantee that the investment objectives, targets, expectations, and strategies will be met. There may be a deviation from the projections and expectations. This may be due to market conditions, liquidity, regulatory issues, or unforeseen circumstances that may hinder the implementation of the strategies. WealthAxis does not guarantee that the objectives and results will be aligned. The investment objectives are goals and not promises. Changes to the strategies may be necessary from time to time. Unmet objectives do not indicate poor management or improper conduct. Risk factors may exceed the planning assumptions.
The responsibility for assessing the investor’s financial situation, goals, time horizon, and risk tolerance rests entirely with the investor. WealthAxis shall not assume responsibility for suitability or appropriateness unless otherwise agreed to in writing. The investor must assess whether the investment is suitable for their personal circumstances and limitations. The investor’s risk tolerance may change over time and must be reviewed periodically. The investor assumes responsibility for understanding all disclosed risks. The absence of knowledge or understanding does not diminish risk. The responsibility for results cannot be completely delegated.
Investors acknowledge that by participating in WealthAxis or accessing any of its information, they understand and accept the risks outlined in this Risk Disclosure Statement. Acceptance of the risks is mandatory. Investors who are unwilling or unable to assume these risks should not invest. This Statement is an integral part of all disclosures and communications. No disclosure can ever be comprehensive, and new risks may emerge. Acceptance is mandatory regardless of actual results. Understanding and acceptance are presumed to be confirmed to the fullest extent permitted by law.
