There are various types of risks associated with investing in equity shares:
Market Risk: As an equity share investor, you want to buy the stock at a lower price and sell it when the price is high. However, if the price of the said share falls, then you can book a loss.
Company Risk: If the company faces any problem, then its stock price can take a hit.
Liquidity Risk: If the company has liquidity problems, then it can cut back on dividends. This can adversely affect its stock price too.
Interest Rate Risk: If the government increases interest rates, then the company will have to pay more interest on loans. This can eat into its profitability and impact stock prices.
Inflation:Increasing inflation rate results in an increase in the cost of raw material that can reduce the profits of a company and negatively affect its stock price.