Understanding risk and reward is key to investment. Any investment that can generate large returns usually involves assuming more risk. Shares are no exception.
Share prices can and sometimes do fall sharply - either because of a company-specific event or because of market volatility. Some shares are more sensitive to market movements than others.
Shares in smaller companies are particularly susceptible to this. Also, the spread between the prices at which brokers will buy from and sell to you may widen unexpectedly. It may be tricky to sell shares quickly if the market is volatile.
If a company gets into financial difficulties or becomes insolvent, equity shareholders are generally last in line for a share of any remaining assets - bank creditors and bondholders rank ahead of them. Often, shareholders get nothing at all.
Our share tips are intended to be investment ideas for you to consider. Only you can decide whether something we have tipped is a suitable investment for you, and you must take the final responsibility for the decision to buy, or sell. If you are uncomfortable with this, you should consider lower-risk investments or collective investments instead.
For more details, see our disclaimer.
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