Losing principal or running out of money
Risk and return potential are related. For instance, bonds historically tend to have a lower level of risk than stocks, and as such, have a lower level of return potential. Stocks demand a higher level of return potential based on their higher risk levels.
Investing will involve some level of risk, including the possible loss of principal. Investing in fixed income securities could involve market risk, if sold prior to maturity, and credit risk, especially if investing in high-yield bonds, which have lower ratings and are subject to greater volatility. All fixed income investments may be worth less than the original cost upon redemption or maturity.
Asset allocation and diversification does not eliminate the risk of fluctuating prices and uncertain returns.