New Delhi, Nov. 20 -- Investing in a debt fund is perceived to be simple, but it is not so really. It is more complex and equally risky to invest in debt funds. In this article, I will discuss various types of risks involved in investing in debt funds and what precautions to take while investing in them.

Any investment involves some degree of risk. No investment is safe. Like if you do not want to invest the money to avoid the risk and keep the money at home, you incur the risk of erosion of money due to inflation.

Likewise, if you invest in a very safe product, you carry the risk of the twin ghosts of "inflation and tax" eating into your returns. There are basically three types of risks involved when it comes to investing in any debt m...