Investing in the stock market is riskier than saving cash or bond investments due to the inherent volatility and unpredictability of stock prices, which can fluctuate significantly based on market conditions, economic factors, and company performance. In contrast, cash and bonds typically offer more stable returns and lower risk of loss.
One way to mitigate this risk is through diversification, which involves spreading investments across a variety of assets (different stocks, bonds, or sectors) to reduce exposure to any single investment's poor performance. This strategy can help balance out losses in some areas with gains in others, thereby lowering overall portfolio risk.