Mutual Funds: The Risk Factor

Should I risk it? People who have virtually doubled their money in the stock market over the past three years are asking whether they should risk their gains to stay in. After all, the Dow industrials index hit its high last summer and is only haltingly making its way back. Emerging market funds, which were supposed to be the bet on the future, have taken a beating. The impact of the unexpected Asian economic crisis on corporate earnings remains a mystery. And which way will rates go? Deflation may push them down, but the economy is still rolling along at 4% annual growth. How is one supposed to assess risk in this confusing environment?

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