Equity risk refers to the potential for loss that investors face when investing in stocks or equity securities. This risk arises from fluctuations in the market value of these investments, which can be influenced by various factors such as company performance, economic conditions, and investor sentiment. When the value of a stock decreases, investors may experience financial losses, making equity risk a significant consideration for anyone looking to invest in the stock market. Understanding this risk is essential for making informed investment decisions and managing a diversified portfolio.