Stock Market Risk Law and Legal Definition

Stock market risk is the tendency of stock prices to decrease due to the change in value of the market risk factors. Generally, value of units or shares of a mutual fund that invests in securities is directly related to the market value of those investments held by the mutual fund. The market value of those investments will go up and down depending on the financial performance of the issuers and general economic, political, tax and market conditions. Standard market risk factors are stock prices, interest rates, foreign exchange rates, and commodity prices.