The risks associated with stocks

The risks associated with stocks

SaxoInvestor
Saxo Be Invested

Saxo Group

Buying and selling stocks always comes with risk. There is no guarantee that you will make a profit, nor is there a guarantee that you will ever recoup your initial investment. As an investor, it is crucial that you are aware of the risks surrounding every transaction. Even if a stock seems like a “sure thing” to you, there are always risks involved.

Some important risks to consider include:

  • Market risk: It is impossible to know exactly what will happen to a company's stock price over time. The  stock might go up, but it could just as easily go down. Unexpected events, such as market crashes or company troubles, could reduce the stock price, negatively affecting your investment.
  • Volatility risk: Stock prices are inherently volatile, and the degree of fluctuation can vary significantly depending on the sector. These fluctuations can take your portfolio on a rollercoaster ride, with some sectors experiencing more dramatic ups and downs than others.
  • Company liquidation: Companies succeed, and companies fail. This is another inevitable risk for you to keep in mind. If a company goes bankrupt and enters liquidation, the shares in that company may cease to exist. If this happens, your investment in that company becomes completely worthless. 
  • Political and legislative risks: Companies are significantly influenced by the policies and legislation of the countries in which they operate. Changes in the political environment, including shifts in policies, rules, and laws, can negatively impact a company’s stock price. For instance, Germany’s decision to close all nuclear plants by 2022 provided a boost to companies supplying renewable energy, while energy companies faced substantial challenges due to the plant closures.

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De informatie op deze pagina is niet bedoeld als individueel beleggingsadvies of als een individuele aanbeveling tot het doen van bepaalde beleggingen. De beloning van de auteur van dit artikel staat/stond/zal niet direct of indirect in relatie (staan) met zijn specifieke aanbevelingen of standpunten. Ondanks het feit dat Saxo Nederland alle zorgvuldigheid in acht neemt bij het samenstellen en onderhouden van deze pagina's, en daarbij gebruik maakt van bronnen die betrouwbaar geacht worden, kan Saxo Nederland niet instaan voor de juistheid, volledigheid en actualiteit van de geboden informatie. Indien u zonder verificatie of advies gebruikmaakt van de verstrekte informatie, doet u dat voor eigen rekening en risico. Aan de informatie op deze pagina's kunnen geen rechten worden ontleend. Saxo Nederland is een handelsnaam van Saxo Bank A/S. Beleggen brengt risico’s met zich mee. Uw inleg kan minder waard worden. Meer informatie over de specifieke productrisico’s kunt u lezen op de productpagina’s. 

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