Are mutual funds high risk?
Mutual funds are generally higher risk than savings accounts and GICs, which are principal protected and can have guaranteed returns. However, the risk varies depending on the type of fund. Also, the risk may be offset by the fact that funds often hold diverse investments. For example, if one investment, like stock in a particular company, performs poorly, the fund’s other investments may help balance it out.
Some mutual funds invest in particular industry sectors, and if the industry as a whole is struggling the fund would likely experience a loss. We can help you understand your risk profile and where your money is invested.