Risk: The value of your investment can go down.
Reality: Time mitigates risk. Over the past two decades there’s been just one five-year period when the U.S. stock market lost ground.

Risk: Your investment isn’t guaranteed, like a certificate of deposit.
Reality: The steady return from a fixed-income investment will lose ground, over time, to inflation.


Risk: The prices of individual securities can vary dramatically.
Reality: The diversification inherent in a mutual fund substantially reduces the impact of any individual declines.

Risk: The market value of securities changes frequently.
Reality: Be thankful! If market value didn’t change, there would be no reward for investing.

Risk: Bond issuers can default.
Reality: Missed payments of interest and/or principal are rare, and diversification minimizes their effects.

Risk: Interest rates could go up (or down).
Reality: They will. Then they’ll go the other way. Again and again and again.

Risk: Investments outside the U.S. are subject to fluctuating currency values.
Reality: Over time, currency fluctuations tend to balance out. Diversification helps, too.

Risk: Unstable political and social conditions can hurt investments overseas.
Reality: Every day brings bad news for some U.S. company as well–but you’d never know it from the long-term trend of the U.S. stock market.

Risk: Global investments are subject to different securities regulations, accounting standards, and tax rules–and sometimes information can be hard to find.
Reality: Mutual funds are managed by full-time professionals whose jobs depend on their thorough knowledge of markets and companies.

Related posts:

1. Investing Abroad: Risks and Rewards
2. Investing in gold and the truths of the risks
3. Short Term Investing
4. High Yield Investing Finding The Yellow Brick Road
5. Investing In Bonds
6. Understand Risks
7. With less risk Foreign Bonds
8. Indexed Securities: Characteristics and Risks
9. All About Personal Investing In America
10. Develop Strategies to Control Risks