Risk-on occurs when investors are optimistic and willing to pursue higher returns, often favoring stocks, small-cap companies, and other growth-oriented investments. Risk-off occurs when investors become more cautious and seek safety, often favoring cash, Treasury securities, and other lower-risk assets.

Sequence of returns risk is the risk that the timing of investment gains and losses—particularly when money is being withdrawn—can affect how long a portfolio lasts.

Collateralized Debt Obligations (CDOs) are structured financial instruments that pool together various income‑generating assets—such as mortgage‑backed securities, corporate bonds, loans, or other debt obligations—and redistribute the resulting cash flows to investors through tranches with differing levels of risk and return.