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Funding a business
What risk comes to buying shares in an organization
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[QUOTE="Ayuba Ernest, post: 245779, member: 70169"] Purchasing stock in a company exposes an investor to a number of potential downsides. The financial, operational, and reputational risks are the three most significant ones. The risk to one's finances is the one that is most readily apparent. When you buy shares in a company, you are making a financial investment in that company with the expectation that it will generate a profit for you. It is possible that you will get nothing back from your investment if the business does not do well. The possibility that the company will be unable to fulfill its obligations constitutes an operational risk for the business. For instance, when a company is in the process of developing a new product, there is always the possibility that the product won't turn out to be as good as was anticipated. The possibility that the company will be involved in a scandal or other incident that will be detrimental to its reputation is the source of the reputational risk. It is possible that as a result of this, the value of the shares will decrease. Conclusion: These are the three primary dangers that come with investing money in a company by purchasing its shares. Before you make any kind of investment, you ought to have an understanding of these dangers. [/QUOTE]
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