In relation to a portfolio, what does the term 'expected risks' refer to?

The term 'expected risks' in relation to a portfolio primarily refers to considerations around potential future market conditions. This encompasses various factors that could lead to fluctuations in the value of the portfolio over time, including changes in economic indicators, interest rates, inflation rates, and market trends. Expected risks involve assessing uncertainties related to investments and understanding how these uncertainties could impact performance and the overall risk profile of the portfolio.

By focusing on potential future market conditions, investors can better navigate the inherent uncertainties of the market and make more informed decisions regarding asset allocation and risk management. This perspective is crucial in the investment process, as it enables portfolio managers to prepare for various scenarios and develop strategies to mitigate adverse impacts on the portfolio's performance.