Investing in stocks historically gives higher returns than placing money in bonds, GICs, or savings accounts. With higher return comes higher risk. Here I will talk about two risks that come with investing in stocks and how to reduce those risks.
1. Risk of capital loss
You can buy and sell stocks on major exchanges easily through your bank or through a trading platform. However, the flip side of this liquidity is that it’s also very easy to sell at a loss. Some people make better investors in real estate because it is less liquid, even though one usually needs to get a loan to buy a property because the investment is much bigger.