What are the risks of investing in mutual funds?
Investing in mutual funds carries several risks, including market risk, credit risk, and liquidity risk.
Can you explain market risk in more detail?
Market risk refers to the potential for losses due to changes in market conditions, such as economic downturns.
What about credit risk? How does it affect mutual funds?
Credit risk is the risk that the issuers of the securities in the fund may default on their obligations, impacting fund performance.
Are there any strategies to mitigate these risks?
Yes, diversifying your investments and choosing funds with a solid track record can help mitigate these risks.
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