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Tag Archive: Standard deviation


The risk/return tradeoff could easily be called the “ability-to-sleep-at-night test.” While some people can handle the equivalent of financial 813530skydiving without batting an eye, others are terrified to climb the financial ladder without a secure harness. Deciding what amount of risk you can take while remaining comfortable with your investments is very important.

In the investing world, the dictionary definition of risk is the chance that an investment’s actual return will be different from expected. Technically, this is measured in statistics by standard deviation. Risk means you have the possibility of losing some or even all of our original investment.   Continue reading

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The Risk/Return Tradeoff

The risk/return tradeoff could easily be called the “ability-to-sleep-at-night test.” While some people can handle the imagesequivalent of financial skydiving without batting an eye, others are terrified to climb the financial ladder without a secure harness. Deciding what amount of risk you can take while remaining comfortable with your investments is very important.

In the investing world, the dictionary definition of risk is the chance that an investment’s actual return will be different than expected. Technically, this is measured in statistics by standard deviation. Risk means you have the possibility of losing some or even all of our original investment. 
Continue reading

Volatility refers to the frequent upward and downward movement of price. The more prices fluctuate, the more volatile the market is. A chart of day-to-day stock prices looks like a mountain range with plenty of peaks and valleys, formed by the daily highs and lows. However, over months and years, the mountain range flattens into more of a gradual slope. What this implies is that if you are planning to hold a stock for the long term (more than a few years), the market instantly becomes less Continue reading

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