Risk Management 101 (Part 1)

Key Points

  • Sound investing comes down to focusing on what you can control, while still maintaining a solid understanding the risks associated with what you cannot.
  • Risk Management involves understanding and controlling for the uncertainties related to the financial markets (systematic risk) or a particular company (idiosyncratic risk).
  • Risk-adjusted return can be quantified by the ratio of expected return divided by risk.
  • Volatility is a common, although imperfect measure of risk.

Continue reading → Risk Management 101 (Part 1)