Virtually all investments involve investment risks. Risks can impact upon the ability of the issuer to make promised payments of principal and interest of securities held by investors, or they can impact upon the market value of a security when investors seek to buy and sell securities. Investors should understand the source from which the issuer will make payments and any conditions - legal or otherwise - that can limit the obligation to make payments or the availability of funds to make such payments.
When a third party insures, guarantees or otherwise offers financial support for payments on securities, investors need to understand the financial condition of such third party and the limitations that may exist on that support. The official statement often contains a discussion of risk factors that the issuer has identified as of the date of issuance of the securities, although additional risks may emerge over the life of the securities.
Investors also should note that most 529 college savings plan investments are not guaranteed against investment loss, except in certain very limited cases. As with any investment in a mutual fund or other equity security, an investment in a 529 college savings plan can decrease in value. Although past performance of a security may be one of several appropriate factors to consider in choosing an investment, such past performance is not necessarily indicative of how the investment will perform in the future.