Question : what is the most risky investment or mutual fund and which is less risky?
Hi i would like to know which mutual fund is most risky and which one is less risky. Correct me if im wrong but my guess would be CD's are the less risky. Please include why are they risky and why are they not thanks.
- asked by wowsors
All Answers:
Answer #1
The least risk is in FDIC insured bank productssuch as savings as CDs. They lack risk becausethey are insured and because banks are stable. Note that even during the mortgage crisis, nobanks failed. Bear Stearns (which isn't a retail)might have failed got bailed out.After bankproducts, US treasury bonds are considered riskfree investments. You can only lose money ontreasuries if the government doesn't pay you. Andthe government can tax, borrow, or print money ifneeded to pay its debts. So essentially riskfree.After bonds come, money market funds. Theseare pools of money used to make ultra short termloans to corporations with strong credit ratings. Loan terms may range from 7-30 days. Moneymarkets are not insured, carry market risk, andpotentially could lose value. But in the historyof money markets, there may only be two or threethat went under. Money market funds will infusetheir own cash if they have to in order tomaintain share price.After that comes stocks andmutual funds (which hold a basket of stocks). Risk factors for stocks vary by industry. They'rejust too numerous to mention. But as you can seenow, interest rates, inflation, and taxes can allaffect stock prices.I guess finally you can lookat futures. Futures are leveraged contracts tobuy hard assets, coffee, pork bellies, oil, etc. Their prices are extremly sensitive. If there isa reported attack on an oil pipeline, futures skyrocket. If the wheat harvest is larger thanexpected (more supply than demand), futuresplummet. So it's much more difficult to predictthe success of the trade. Unlike stocks such asWal-Mart. I shop at Wal-Mart and so do most of myneighbors. We're unlike to stop any time soon. So while Wal-Mart's stock may fall, I probablywon't go broke. You can lose your shirt in thefutures market though.
- answered by phipsi32
Answer #2
hi wowsors, mutual funds is one of the least riskyinvestments you can make. but please take my wordwith a pinch of salt as ALL kinds of investmentsinvolve some risks. you can welcome to visit myreview article on investment. invest wisely andprosper!
- answered by kumcheong
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