The risk many investors fear the most is the risk of a fluctuating market. We fear buying the wrong investment, getting in at the top of the market and selling at the bottom of the market. According to a brochure, recently published by the Mutual Fund Forum, called Understanding and Managing Investment Risk, working with a financial advisor can help an investor understand risk and proceed from that knowledge to make strategic investment decisions. A financial advisor can help investors establish realistic goals and a plan to achieve them.

Most of us don't even understand the various risks we need to consider in investing. For example, there is is the risk of a slowdown in the economy, the risk of a fluctuating market, the risk of investing in a problem-riddled company, the risk of a bond issuer defaulting, the risk of fluctuating interest rates and the risk of inflation eating up our investment.

To help us understand these risks and how to deal with them, a professional financial advisor can walk us through a five-step risk management process in the booklet. The steps are: identify risks, understand risks, develop strategies to control risks, evaluate the risk/reward tradeoff, and make your decision.

While risk can be a frightening thing, the booklet suggests ways it can be managed. There are five broad and proven strategies for controlling investment risk: diversifying your investments (ie: don't put all your eggs in one basket); investing systematically; selecting a seasoned, full time investment manager to manage your money; and seeking the advice of a financial advisor.

This booklet demonstrates how, in dealing with investment risk, you can use the same process that you have used successfully to understand and manage the wide range of risks in life.

The risk brochure, along with brochures on how to select a financial advisor, are available free to consumers by calling 1-800-200-1819.

Mutual Fund Forum is a Bethesda, Maryland non-profit association which educates the public about the role and value of full-service financial advisors. (NAPSI)