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What are the risks associated with investing on the stock market?
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The most significant risk associated with investing on the stock market is market volatility, which can cause the prices of stocks to rise and fall quickly and unpredictably. 2 Other risks include a lack of liquidity, meaning investors may not be able to easily sell their stocks if needed, or risk of insolvency, meaning some companies trading in the stock market may become insolvent, leaving investors with no return on their investments.3 Lastly, there is the risk of fraud, which can occur during the initial public offering process, leading to potential losses for investors.