Equity securities

Risks

Being obvious that investment in equity securities presents opportunities, it is no less true that investment in shares is subject to volatility and risks, the investor having to face many uncertainties, which in many cases can end with the non-receipt of dividends and with the partial or total loss of the invested capital. In addition to greater volatility, that is, a greater risk of price fluctuations, investment in shares entails greater risk for the shareholder in the event of insolvency proceeding or bankruptcy on the part of the company; in these circumstances, the company must be liquidated and the common shareholders would occupy the last place in the net equity distribution with respect to bondholders and other creditors.

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