For example, it may be that the investment ranks behind other debt obligations of the borrower, exposing the investor to a greater risk of loss if the borrower defaults. In other cases, the yield being offered may be linked to the performance of particular underlying asset markets, which may themselves be quite volatile.
There is, of course, nothing inherently wrong with investors taking greater risk. For their own protection, however, they should be fully aware of the risks they are taking, rather than simply thinking in terms of the nominal interest rate offered. Given all this, what should a wise investor do? First of all, seek advice! This applies especially if an investment product looks complicated.