Risk in investing refers to the possibility that your investments may not perform as expected and could even result in a loss of capital. Every investment—whether it’s equity mutual funds, debt funds, SIPs, stocks, or gold—comes with some level of risk because markets and economic conditions constantly change.

In simple terms, risk is the uncertainty of returns.

The most common types of investment risk include:

• Market Risk: Fluctuations in equity and debt markets.
• Inflation Risk: When rising prices reduce the real value of your returns.
• Interest Rate Risk: Especially relevant for debt funds when interest rates change.
• Liquidity Risk: Difficulty in converting an investment into cash when needed.
• Concentration Risk: Investing too much in one sector, stock, or asset class.

A well-designed financial plan and proper asset allocation help you manage risk effectively. Working with a qualified advisor or mutual fund distributor ensures your investments align with your goals, time horizon, and risk profile.