When it comes to money, many people are afraid to try, as a warning that we used to hear every message. 'Mutual funds are subject to market risks. Please read the offer document carefully before investing.' But simply decide not to invest in without even understanding what the risks are a bit ridiculous.
While every investment must share the risks, you can not get a good return for your hard earned money without taking much risk. Therefore, it is very important when considering the investment funds.
The most important relationship to understand with regards to mutual fund investments is the risk- return trade-off. This can be very simply explained as - higher the risk, greater are the returns/loss and consequently lower the risk, lesser are the returns/loss.
There are many different risks, and mutual funds, investors should be aware of before investing. These include market risk, credit risk, inflation risk, interest rate risk, government/political risk and liquidity risk.
There may be many factors that influence the market as a whole, which may cause prices and bond yields up and down. This can happen for large enterprises and small and medium enterprises. This is called market risk. However, a systematic investment plan, which is calculated on the concept of average cost of rupees to reduce market risks.
Credit risk management that addresses investors debt through cash flows of the company. Credit risk is measured by independent rating agencies that the companies and their rate card. 'AAA' rating is considered the safest and D rating is considered poor credit. This risk can be reduced well-diversified portfolio.
Inflation risk is the most common risk existing in the market today. Inflation is simply the buying power of the time. Most investors thinking investment decisions to protect the long-term capital. However, most of these investors end up with the amount of money buys less than it could be a pilot investment. This is because the inflation rate can grow faster than the rate of return. However, the well-diversified portfolio that invests in stocks may reduce the risk of inflation.
Liquidity risk is the risk that arises when it becomes difficult to sell securities, one has already been purchased. Can be mitigated in part to the diversification and also a great risk that the market is likely to buy silver.
While every investment must share the risks, you can not get a good return for your hard earned money without taking much risk. Therefore, it is very important when considering the investment funds.
The most important relationship to understand with regards to mutual fund investments is the risk- return trade-off. This can be very simply explained as - higher the risk, greater are the returns/loss and consequently lower the risk, lesser are the returns/loss.
There are many different risks, and mutual funds, investors should be aware of before investing. These include market risk, credit risk, inflation risk, interest rate risk, government/political risk and liquidity risk.
There may be many factors that influence the market as a whole, which may cause prices and bond yields up and down. This can happen for large enterprises and small and medium enterprises. This is called market risk. However, a systematic investment plan, which is calculated on the concept of average cost of rupees to reduce market risks.
Credit risk management that addresses investors debt through cash flows of the company. Credit risk is measured by independent rating agencies that the companies and their rate card. 'AAA' rating is considered the safest and D rating is considered poor credit. This risk can be reduced well-diversified portfolio.
Inflation risk is the most common risk existing in the market today. Inflation is simply the buying power of the time. Most investors thinking investment decisions to protect the long-term capital. However, most of these investors end up with the amount of money buys less than it could be a pilot investment. This is because the inflation rate can grow faster than the rate of return. However, the well-diversified portfolio that invests in stocks may reduce the risk of inflation.
Liquidity risk is the risk that arises when it becomes difficult to sell securities, one has already been purchased. Can be mitigated in part to the diversification and also a great risk that the market is likely to buy silver.
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