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Risks
1. Volatility: Stock prices on the London Stock Exchange can be susceptible to large and rapid fluctuations, which can cause losses for investors.
2. Liquidity Risk: London Stock Exchange stocks have the potential to become illiquid, meaning there are fewer buyers and sellers for a particular stock, which can make it challenging for investors to exit a position.
3. Interest Rate Risk: A stock may not perform well due to changes in interest rates that can potentially increase borrowing costs for companies and reduce investor confidence.
4. Political Risk: Political shifts or instability in the region where the stock is based can lead to increased volatility and adversely affect stock performance.
5. Regulatory Risk: Changes in regulation or legislation can change the way businesses operate and subsequently impact their stock performance.