What Are the Risks Associated with Equity Securities?
While equity securities offer potential for high returns, they also come with risks:
Market Risk: The value of equity securities can fluctuate due to market conditions, which can result in loss of investment. Business Risk: Poor performance by the company can affect the value of the equity securities. Dividend Risk: There is no guarantee that a company will continue to pay dividends, as they are dependent on the company's profitability. Liquidity Risk: While many stocks are liquid, some may be difficult to sell without affecting the market price.