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In general, the higher the potential return, the higher the risk of potential loss.
Although some funds are less risky than others, all funds have some level of risk –
it’s never possible to diversify away all risk also –
even with so-called money market funds This is a fact for all investments.
Each mutual fund has a predetermined investment objective that tailors the fund’s assets also regions of investments and investment strategies.
At the most basic level, there are three flavors of mutual funds also :
those that invest in stocks (equity funds) also those that invest in bonds (fixed-income funds),
Those that invest in both stocks and bonds (balanced funds), And those that seek the risk-free rate
(money market funds) also.
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