Downside

The estimate of the potential decline in price or value of an asset.For example,someone might say “The downside in ABC stock is $25″ meaning that they think a $25 decline in price  is the worst possible situation. However, this may not be the case and the downside might be grossly estimated either due to human error(overoptimism) or intentional as in the case of a special interest trying to peddle a stock.

It can also be used to refer to the disadvantages of an investment. For example, “Investing in gold is nice, but the downside is that you are not paid any interest or dividends”

Investors should investigate an investment to fully understand the downside. Remember, if someone’s telling you about an investment and trying to sell it to you, they might not disclose the downside fully.

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