Are Mutual Funds Risky Investments?

Safest Investment

September 6, 2016

Q: I heard mutual funds are risky investments and my money would be safer in GICs. Is this accurate?

A: A diversified portfolio is always a better solution when it comes to your finances. If your definition of risk only considers future value of investments compared to the initial investment, mutual funds may be risky because future value can’t be guaranteed. The general purpose of most investments is to cover future expenses such as retirement or post-secondary education, which are subject to inflationary increases, so consider inflation a risk factor when assessing the suitability of an investment.

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