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. Investors in equities may experience gains or losses based on the performance of the underlying companies. Unlike fixed-income investments, such as bonds, which typically offer more stable returns, equity investments can be more volatile, leading to higher potential rewards but also greater risks.