Understanding the 100 Percent Downside in Risk Management. Being an eternal optimist, one of the things I found hard to fathom was the unlimited downside risk to any transaction. When I make a 5000 $ investment, the assumption is that the downside risk is limited to 5000 $ only. This is especially compared to the unlimited potential that any increase has. While this might be true on face value, the reality is that a 5000 $ loss on a 5000 $ investment is a 100% loss and all