Equity Risk

Equity risk refers to the possibility that investing in stocks (equities) will result in a loss of value. Since stock prices fluctuate based on company performance, market conditions, and economic factors, there’s always a chance that the value of your investment can go down. This risk is inherent to equity investing and tends to be higher than in more stable investments like bonds. However, equities also offer the potential for higher returns over the long term. Managing equity risk involves diversifying investments and understanding market dynamics to balance potential growth with the possibility of loss.