The 9 Rules of Risk Management
Risk management is a tough topic for investors to comprehend (me included). The difficulty comes when you need to try to measure the risk of a particular stock. Wouldn’t it be helpful if there were some rules that could help guide an investor? As I was browsing through my local Chapters (like Barnes and Noble) [...]
If Your Portfolio Is Down, Just Wait Longer
“If I am not back in 5 minutes….just wait longer” – Jim Carrey, Ace Ventura. If you have seen this movie as many times as I have then you can picture Ace Ventura saying this. The quote immediately came to mind as I was searching around the web for some probability statistics on earning a [...]
Margin Can Make you Rich…or Really Really Poor
What if you could double your returns on a 5% increase in stock price with no extra work? Sounds good right? That is the sales pitch you often hear from some stock brokers when they try to convince the average investor to buy stocks using margin – or borrowed money to purchase investments. When things [...]
Risk Capacity and Risk Tolerance Are Different Beasts
Just because you have a high level of tolerance for risk does not mean that you have the same level of capacity for risk. These are quite different concepts and I am suggesting that as investors we should understand the difference. In this post I will explain my interpretation of the two types of risk. [...]
Subprime – Do We Have a Problem Managing Risk?
This post exploring the risk issues inherent with the subprime markets is a guest post by Middle Class Millionaire. Middle Class Millionaire is a personal finance blog dealing with all aspects of Canadian and American large cap securities, retirement planning, general market conditions and all issues relevant to Do-It-Yourself investors. Due to the ongoing subprime [...]
Investment Risk Profiles
Can your stomach tolerate a 30% drop in portfolio value rather quickly? Determining your investment risk profile is one of the first steps any investor should take when thinking about designing a portfolio and an asset allocation. It really will tell you what level of risk you will be comfortable with in your portfolio. It [...]
Examining My Dividend Portfolio Volatility Using RiskGrades
Ever log into to Quicken, Microsoft Money, or your Excel spreadsheet to see that your portfolio has dropped 5% or even more in one day? This has everything to do with the volatility of the assets you hold in your account. Volatility is a statistical measurement (don’t get scared) of how much an asset’s value [...]
