What are the risks involved in stock market?

There are several risks involved in investing in the share market. Here are some of the key risks to be aware of:

  1. Market risk: The share market is subject to volatility and fluctuations due to various factors such as economic conditions, political events, and global events. This can impact the value of your investments.
  2. Company risk: The performance of individual companies can impact the value of their shares. This can be due to factors such as poor management, declining sales, or increased competition.
  3. Liquidity risk: The share market can be illiquid, meaning it may be difficult to buy or sell shares at the desired price, especially during periods of market turmoil.
  4. Interest rate risk: Changes in interest rates can impact the share market as they can affect the borrowing costs of companies and the investment decisions of individuals.
  5. Currency risk: If you invest in shares of companies that operate in foreign countries, you may be exposed to currency risk as fluctuations in exchange rates can impact the value of your investment.
  6. Regulatory risk: Regulatory changes or legal issues can impact the share market and the performance of individual companies.

Remember, investing in the share market involves risks, and it’s important to be aware of these risks and have a plan in place to manage them. It’s advisable to consult with a financial advisor who can help you assess your risk tolerance and create an investment strategy that aligns with your goals and risk tolerance.

Slight movements can mean big profits