There is nothing like a no risk product. Let me give you and example. We normally consider government bonds are risk free. Investors into government bonds of Greece lost about 50% of their principal.
* Similarly, one feels that bank deposits are safe. However, this actually depends on the creditworthiness of a bank.
Your bank fixed deposits are protected only upto Rs 1 lakh by a deposit insurance.
* The other aspect to keep in mind as is today prevailing in developed countries, is that the returns that you get out of a fixed deposit are so low that they are insufficient to take care of various needs.
* Today, pension funds in Japan have not much option but to invest in equities if they have to deliver any positive return to pay annuities.
Hence, it is important that every individual spends time not only in assessing what the returns a product would give, but also what is the risk of a product. And there is nothing like no risk.
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