Managing Investment Risk

Many clients do not fully understand the risks involved with investing. All investments carry some degree of risk. Stocks, bonds, mutual funds and exchange-traded funds can lose value, even all their value, if market conditions sour. Even conservative, insured investments, such as certificates of deposit (CDs) issued by a bank or credit union, come with inflation risk. They may not earn enough over time to keep pace with the increasing cost of living. The FINRA Investor Education Foundation has put together a document called Managing Investment Risk which can help teams educate their clients.