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Tag Archive: investment risk


Someone asked me what’s your view on the market? my response was it will fluctuate. Some experts feel there is a blogbreakout around the corner, some of them carefully waiting for the Fed policy this Friday. While some of them feel there will be a correction.

Global events are an integral part of market now, you cannot control these events neither can devote your full-time in predicting these events. As an investor what you can control?

  • You can control how much money you put behind the idea.
  • You can control which markets you trade in.
  • You can control how much you are willing to risk per trade barring any gap

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The thumb rule that we know higher expected returns are related to higher risk. There have been claims like risk is blogmore than just volatility. Was going through a journal Journal of Portfolio Management, and realized arguing that risk is more than just risk. The term is unnecessarily narrow; securities offer returns for reasons other than risk, as the word conventionally is used.

The four sources of unattractiveness that I came across from the journal:

  • Economic–The common notion of investment risk. The danger that a security might not be able to make required current payments, that these payments might not prove as valuable as expected (as caused, for example, by inflation), or that projected future payments might be less than anticipated. As Ibbotson and Idzorek write, people naturally do not seek these attributes and wish to be compensated for owning them.

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