What Are The Risks Involved With Mutual Funds?
A mutual fund reduces the risk of large price fluctuations through careful selection of securities, and by maintaining a diversified portfolio. There is much less risk in owning shares in 50 different companies than in owning stock in one or two companies. In spite of diversification, however, share prices will decline in a falling market. This is why proper trend tracking of mutual fund purchases and sales is important.
