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Obsolescence Risk
       
 
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Obsolescence Risk

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Obsolescence Risk
The Risk that a process, product or technology used or produced by a company for profit Will become obsolete, and is no longer competitive in the marketplace.
    
Obsolescence Risk is most significant for technology-based companies or companies with offerings that are based on technological advantages. This can also extend to the Risk that certain costs laid out for obsolete products or services cannot be recouped. These risks can significantly alter a company's growth prospects and earning potential.
    
The stock market "graveyards" are littered with dead companies whose products or technology was rendered obsolete. Due to obsolescence, none of these companies exists today! Obsolescence Risk is a factor for all companies to some degree, and is a necessary side-effect of having a thriving and innovative economy.

Risk is chance that an investment's actual return Will be different than expected. This includes the possibility of losing some or all of the original investment.
Posted by  Opal Financial Group
 
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