UNDERSTANDING AND MANAGING RISK

UNDERSTANDING AND MANAGING RISK

All investments whether in shares, debentures or deposits involve risk: share value may go down depending upon the performance of the company, the industry, state of capital markets and the economy; generally, however, longer the term, lesser the risk; companies may default in payment of interest on their debentures deposits; the rate of interest on an investment may fall short of the rate of inflation reducing the purchasing power.

While risk cannot be eliminated , skillful management can minimize risk. Mutual Funds help to reduce risk through diversification and professional management. The experience and expertise of Mutual Fund managers in selecting fundamentally sound securities and timing their purchases and sales, help them to build a diversified portfolio that minimizes risk and maximizes returns.

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