All investments carry risk, and stocks are no exception. Key risks to be aware of include:
- Market risk: the value of your investment can fall as well as rise, depending on overall market conditions. You could lose some or all of your invested capital.
- Company-specific risk: because your investment depends on one company, that company's results, management decisions, competitive position, or insolvency can reduce the value of your holding significantly, in the worst case, to zero.
- Concentration risk: holding only a few individual stocks leaves your portfolio exposed to a small number of companies. Spreading investments across more companies, sectors, and regions reduces this risk.
- Currency risk: many instruments are economically exposed to a currency other than the euro (e.g., US shares), even when you buy and sell them in euros on this platform. Exchange-rate movements between the euro and that currency will affect your returns, independently of the instrument's own price.
- Liquidity risk: in unusual market conditions, or for stocks with lower trading volumes, it may be harder to buy or sell at your expected price.
- Corporate action risk: events such as a delisting, an insolvency, or a merger on unfavorable terms can affect the value or the liquidity of your holding. Mintos processes these events on your behalf but cannot change the terms a company sets.
Stocks are regulated financial instruments, but this does not remove market or company risk. Always invest in line with your financial goals, risk tolerance, and time horizon, and only invest money you can afford to lose.