As an investor, the risks involved in investing in companies on the stock exchange include:

• Market Risk (Systematic Risk): This is the risk of stock prices fluctuating due to broad economic, political, or social factors that affect the entire market. Stock prices can be very volatile and unpredictable, influenced by local and international events

• Volatility Risk: Stock prices can experience significant price swings over short periods, which can be unsettling and lead to potential losses, especially for short-term investors. Volatility can be driven by company performance, economic indicators, political events, or speculative trading

• Inflation Risk: Inflation reduces the purchasing power of money, which can erode the real returns on investments if the investment returns do not keep pace with rising prices

• Interest Rate Risk: Changes in interest rates impact borrowing costs for companies and consumers, which can affect corporate profits and stock prices. Rising interest rates often lead to lower stock prices in sectors sensitive to borrowing costs

• Liquidity Risk: This arises when an investment cannot be quickly sold without a significant loss in value. Illiquid stocks or markets can force investors to sell at unfavorable prices

• Financial Risk: Related to a company's ability to meet its debt obligations. Companies with high debt levels are more vulnerable to economic downturns, which can lead to stock price declines or even bankruptcy

• Credit Risk: The risk that a company may fail to repay its debts, affecting investors holding the company's bonds or debt instruments

• Political and Regulatory Risk: Changes in government policies, regulations, or political instability can negatively impact stock prices. Sudden regulatory changes or unfavorable government actions can cause losses

• Industry-Specific Risk: Certain industries are more volatile due to factors like innovation cycles, commodity prices, or regulatory changes. For example, technology and airline sectors often face higher risks

• Unexpected Events: Unforeseen events such as natural disasters, company scandals, or sudden economic shocks can drastically affect stock prices

• Exchange Rate Risk: For investments in foreign companies, currency fluctuations can impact returns when converting back to the investor’s home currency

Overall, investing in stocks carries the possibility of losing some or all of the invested capital, and returns are uncertain due to these various risks. However, understanding these risks can help investors make informed decisions aligned with their financial goals and risk tolerance