All of them, for example, are subject to market risk. That's because the prices of securities go up and down. Once you've identified a risk in Step 1, the next step is to understand it. Let's look at market risk. The answer is that it's certain.
Some investments tend to fluctuate in value a great deal, others less so.
An investment with wide price fluctuations can often make sense for a long-term investor but be inappropriate for someone with less time. There are other factors to consider, too, such as how much fluctuation risk you personally feel comfortable taking and what percentage of your assets you're considering investing. Once you understand the possible risks, it's time to move on to Step 3 and look at strategies which can help you control risks. In our everyday lives we act to control our exposure to risk by doing things such as checking the weather forecast before leaving the house. The investment world has risk-reducing strategies, too.