Since asset prices reflect all the different risk factors affecting supply and demand for an asset, the most generalized risk faced by an investor is price risk. This risk is also related to the volatility of an asset's price, i.e., how widely it swings up and down. For common stocks, the primary source of price risk is in the general fluctuations of the stock market itself. For bonds, the risk is of a rise in interest rates which leads to a fall in bond prices. The longer the maturity of the bond, the more its price will change in response to a change in interest rates.
Price risk is the primary threat in the short-run for investors.
If you are not forced to sell, there is the likelihood of prices recovering given enough time. Longer holding periods will moderate the impact of volatile prices. This is the risk that an issuer of a security may be unable to meet the terms of the issue. Also referred to as credit risk, this may mean that the issuer cannot pay interest in a timely manner or cannot pay the principal at the end of the agreed upon period. Default risk may also arise as a result of business risk.