Investors are often not aware of the kind of risks that are present in these instruments and hence they go out with a mindset that might not be appropriate for the investment.
Investors should not blindly chase returns and ratings of the mutual fund schemes. It makes a lot of sense to understand risk associated with schemes before investing your hard earned money.
While mutual funds can help manage credit risk and reinvestment risks, investors must understand how individual mutual fund schemes function before committing their hard earned money
Considering the post 2008 market scenario, if there's one thing almost every investor knows, it's that there's no such thing as a free lunch. If you want gains from the markets, you're going to have to stomach volatility.