Interest rate risks: this is a problem mostly in fixed income securities

[zihadhasan012]

If a country defaults, it can expose your investment to risk. Credit risk: if an issuer of a bond goes bankrupt, then you will hold worthless bonds. A good example of this is Sears, which recently announced that it will declare bankruptcy. Currency risk: this is where a currency of a country loses value. This affects both bonds and equities. An example of this happened in Venezuela, whose currency lost 95% its value in August 2018.


In this situation, the value of fixed asset securities goes down morocco business email list when interest rates rise. Liquidity risk: this is a risk where there are no participants in the market to buy the held securities. Market risk: this happens when the securities market is in a bear market. Alternatives to mutual funds Since mutual funds are usually ideal for long-term investments, it is also important for you to have exposure to shorter-term securities.


A good way to do this is to trade - the buying and selling of financial securities like currencies, stocks, commodities and indices for the short term. The benefit of this is that you can buy those you believe will go up and short what you believe will go down. With mutual funds, there is no short selling. Trading will also allow you to use leverage which helps you buy more than the capital amount you have available for trading.