Concept
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Equity holders have high price exposure as shares are openly traded. As equities are seen as being longer-term investment instruments, in the short-term they may experience price volatility and devaluation. Generally, an instruments exposure to higher volatility means investors need to spend more time in the market to receive greater returns. However, this is not a rule, as an investor can buy a share today and sell it tomorrow. Although, it is accepted as a long-term market, it ultimately depends on the investors action.•As mentioned above, a shareholder may exercise their vote to force a dividend distribution, but in cases where profits do not allow for a distribution, the shareholder will experience what is known as dividend risk.