During the 2008 financial crisis, the average ultra-short bond fund lost 7.9% for the year; the Charles Schwab YieldPlus fund lost 35% (note: a lawsuit forced Schwab to pay a $119 million fine to settle SEC civil charges).

For the first half of 2013, the correlation between the S&P 500 and alternative investments has increased—a trait not desired by most advisors. Correlation does not measure degree of movement. Instead it assigns a number between +1.0 and -1.0 to show whether two investments tend to move up and down together.

As of September 2013, the MSCI Frontier Markets Index (141 companies) was valued at $123 billion, a valuation < 1/3 of Apple. Being small can have negative consequences. For example, it has been estimated that it would take > 10 days to liquidate a $100 million position in a frontier market (but just an hour to dispose of a similar position in an emerging market).

Closed-end funds (CEFs) trade on exchanges and almost always trade at a NAV discount or premium. For example, at the end of September 2012, 70% of CEFs traded at premiums; a year later, 89% traded at discounts (67% traded at discounts > 5%). One risk often not considered is the fact may CEFs are leveraged, which can magnify yields, losses, and gains. 

Since the introduction of its first fund (ICA) in 1934, 67% of the mutual funds offered by American Funds have outperformed their respective indexes on a 5-yearing rolling period basis through the end of 2012. Since 2003, 77% of its funds have beaten their indexes on a rolling 5-year basis; the percentage increases to 92% for rolling 10-year periods starting in 2003.