Shares/Stock Why Stock Market Investments Are Always Risky?

[Good-Guy]

There are a lots of investment opportunities in the world and some of them are less risky, while other are quite risky. Stock market is considered as a risky investment, but I have always wondered if it is always a risky investment or not. There are many people who trader in stock market and they are working as full-time traders. If stock market investments were that risky, then they would never had been working as full-time stock traders. The same goes for cryptocurrency markets. Cryptocurrency is considered as a risky investment, but still many people actually invest in those markets as well.

I am sure that any kind of business is quite risky, but stock market and cryptocurrency markets are much riskier. This is because if you invest money in any other business, the chances are that you will probably earn profits. However, when it comes to such risky markets, anything can happen. You may earn lots of money or you may lose it. So, should stock markets be always be viewed as risky investments or should they be viewed as markets where money could be made without involving any risk at all? What do you think about it?

 

[Alexandoy]

I agree that there is risk in any investment and stock is one investment that also has risks. When we read about the crash of the stock market what comes to mind are the losers. We should understand that when the prices of stocks go down there will still be buyers who will speculate on the market conditions in the future. That means the losers now will have nothing if they don't buy stocks or if they have divested themselves of their shares of stocks. In other words, trading in the market is like a gamble that you may lose now but you can win tomorrow.

With crypto that is the same but crypto is riskier because it stands on nothing. Stocks stand on the corporation that owns the stocks which means the stock will have value as long as the company is in good condition. With crypto you don't have that basis. All you see is the market behavior that you will buy when there is a dip and you will sell when the price is high. That is clearly gambling to me.

 

[Abee111]

When it comes to risk, here’s a reality check. All investments carry some degree of risk. Stocks, bonds, mutual funds and exchange-traded funds can lose value, even all their value, if market conditions sour. Even conservative, insured investments, such as certificates of deposit (CDs) issued by a bank or credit union, come with inflation risk. They may not earn enough over time to keep pace with the increasing cost of living.
When you invest, you make choices about what to do with your financial assets. Risk is any uncertainty with respect to your investments that has the potential to negatively affect your financial welfare.
There are other types of risk. How easy or hard it is to cash out of an investment when you need to is called liquidity risk. Another risk factor is tied to how many or how few investments you hold. Generally speaking, the more financial eggs you have in one basket, say all your money in a single stock, the greater risk you take
In short, risk is the possibility that a negative financial outcome that matters to you might occur.
There are several key concepts you should understand when it comes to investment risk. And that can be base on the type of your investment