“Take calculated risks. That is quite different from being rash.”
General George S. Patton
In the context of stock market investment, the issue of risk has many facets, as an investor may be potentially exposed to a great number of risks. Many of these risks may indeed be unquantifiable, due to the very nature of the investments being undertaken.
Stock investment may be subject to risks such as:
For this reason, many traders use simple techniques to try and reduce their risk exposure – for example, a trader may decide only to trade amongst highly liquid stocks to attempt to reduce liquidity risk.
In reality, the concept of ...