Risk Management for Investors

On 06/07/2010, in Investment Concepts, by Jordan Wilson

Becoming an effective investor requires you to properly manage investment risk.

Today we shall look at how this is typically done.  

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Nonsystematic and Systematic Risk

On 05/18/2010, in Investment Concepts, by Jordan Wilson

When making investment decisions, one should always perform both quantitative and qualitative analysis.

By investment decisions, I include financial instruments such as stocks and bonds. But it also refers to any decisions you make when operating a business.

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Limitations of Standard Deviations

On 05/13/2010, in Investment Concepts, by Jordan Wilson

While standard deviations are indeed useful, be aware that there are limitations to their use.

Here are a few things you should consider before using standard deviations as a risk measure.

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Investment Risk in Greater Detail

On 05/11/2010, in Investment Concepts, by Jordan Wilson

Today we look at investment risk in greater detail.

This expands on our preliminary discussion in Defining Investment Risk.

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Defining Investment Risk

On 05/07/2010, in Investment Concepts, by Jordan Wilson

What is investment risk?

Investment risk is a form of speculative risk. Speculative risks differ from pure risks in that with a speculative risk there is a possibility of gain, not just loss or no change in status.

But what does that mean?

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A Brief Introduction to Risk

On 05/03/2010, in Investment Concepts, by Jordan Wilson

The concepts of risk and return are core to understanding the investment process.

Investors wish to maximize their returns while minimizing risk. Asset classes are compared on the basis of their risk and their risk-return expectations. Hedging activities are conducted to reduce risk while leveraging helps to increase risk.

Everything investors do relates to risk and return.

But what is risk?

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