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Risks You Could Actually Do Something About

Highlights

  • Investors should focus on long-term risks, not short-term volatility
  • Inflation, a weakening dollar and rising rates are serious risks
  • We advocate combining traditional, specialized and alternative assets

In the past, a balanced portfolio consisted almost entirely of stocks and high quality bonds. But such a narrow approach can hardly hedge against today’s risks, says Lori Heinel, Chief Investment Strategist, discussing the role of protection* as it relates to mitigating or hedging against risk in a portfolio.

*Protection is positioned as an investment goal. Investing in certain securities may help to hedge against certain risks, but does not imply any guarantee from loss. Mutual funds are subject to market risk and volatility. Shares may gain or lose value. Fixed income investing entails credit risks and interest rate risks. When interest rates rise, bond prices generally fall, and a fund’s share price can fall.

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Protection is positioned as an investment goal. Investing in certain securities may help to hedge against certain risks, but does not imply any guarantee from loss. Mutual funds are subject to market risk and volatility. Shares may gain or lose value. Fixed income investing entails credit risks and interest rate risks. When interest rates rise, bond prices generally fall, and a fund’s share price can fall.

Distributions from MLP funds have been classified as "return of capital" which reduces the investor's adjusted cost basis.

Investing involves risk, including the risk of possible loss.

Commodity-linked investments are considered speculative and have substantial risks, including the risk of loss of a significant portion of their principal value. Investments in real estate companies, including REITs or similar structures, are subject to volatility and risk, including loss in value due to poor management, lowered credit ratings and other factors. Smaller real estate companies may also be subject to liquidity risk.

Investing in MLPs involves additional risks as compared to the risks of investing in common stock, including risks related to cash flow, dilution and voting rights. Energy infrastructure companies are subject to risks specific to the industry such as fluctuations in commodity prices, reduced volumes of natural gas or other energy commodities, environmental hazards, changes in the macroeconomic or the regulatory environment or extreme weather. MLPs may trade less frequently than larger companies due to their smaller capitalizations, which may result in erratic price movement or difficulty in buying or selling. MLPs are subject to significant regulation and may be adversely affected by changes in the regulatory environment including the risk that an MLP could lose its tax status as a partnership.

These views represent the opinion of OppenheimerFunds, and are not intended as investment advice or to predict or depict performance of any investment. These views are subject to change based on subsequent developments.

Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.

 

Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.

Before investing in any of the Oppenheimer funds, investors should carefully consider a fund's investment objectives, risks, charges and expenses. Fund prospectuses and summary prospectuses contain this and other information about the funds, and may be obtained by asking your financial advisor, visiting oppenheimerfunds.com, or calling 1.800.CALL OPP (225.5677). Read prospectuses and summary prospectuses carefully before investing.

Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc.
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