Level | Beginner

What are the risks involved in investing in mutual funds?

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Key Takeaways

  1. Mutual funds are as safe as any other investment instrument.

  2. The risks in mutual funds could be external in nature or due to selecting funds that may not be appropriate for your risk profile.

  3. You must ensure that you understand and are comfortable with the investment objective and strategy of the products that you invest in.

  4. Many behavioral biases can also creep in while making investment decisions and it is important to be aware of them.

  5. Seek the help of a professional financial advisor to make sound investment decisions and select suitable funds.