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Assessing Risk

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ETFs and Risk Measurement: Modern Portfolio Theory

How well any specific ETF fits into a portfolio — and to what degree it affects the risk of a portfolio — depends on what else is in the portfolio. This concept is called [more…]

ETFs and Risk: Measuring Risk through Correlation

These correlations of several iShares ETFs show to what degree different ETFs moved in the same direction over a recent three-year period. The lower the correlation, the better — from a portfolio-building [more…]

ETFs and Risk: How to Diversify Your Portfolio

Experts don’t agree on how best to diversify the domestic-stock portion of an ETF portfolio or any investment portfolio for that matter. Two competing methods predominate: [more…]

ETFs and Risk: Keep Diversification Simple

You can build yourself, at least on the domestic side of your stock holdings, a pretty well-diversified portfolio with but four ETFs: one small value, one small growth, one large value, and one large growth [more…]

ETF Portfolio: Things That Don’t Matter When Selecting a Portfolio Strategy

Before you invest your money in individual stocks or bonds, exchange traded funds (ETFs) or mutual funds, you should ask yourself these questions: How much return do [more…]

Are ETFs Risky?

That all depends. Some ETFs are way riskier than others. It all comes down to a question of what kind of ETF we’re talking about.

Most ETFs track stock indexes, and some of those stock indexes can be extremely [more…]

Rebalance Your ETF Portfolio

There are circumstances where it makes sense to trade ETFs rather than buy and hold. For example, you need to rebalance your portfolio, typically on an annual basis, to keep risk in check [more…]

Why Rebalancing Your ETF Portfolio Is Critical

Prepare yourself for the next market storm! How? The answer is fairly simple: Don’t allow any one slice of your ETF portfolio to overtake the rest. Periodically pull your portfolio back into balance. [more…]

How Often You Should Rebalance Your ETF Portfolio

The question of how often to rebalance an investment portfolio has been studied and restudied since long before ETFs arrived on the scene. Most financial professionals agree that once a year is a good [more…]

How to Avoid the Risk of Investing in Oil Commodities

As with most aspects of commodities, tanker spot rates and fixed rates, which provide the bulk of a shipping company’s revenue stream, are highly cyclical. It’s not extraordinary for shipping rates to [more…]

Effect of the 2008 Global Financial Crisis on Commodity and Investment Markets

What started as the bursting of the real estate bubble in the United States caused a chain reaction disrupting commodity prices and threatening the very foundations of the global economic system. [more…]

The 2008 Government Bail Outs and the Effect on Commodities and Investment Markets

Because banks provide the necessary liquidity and credit availability for the global economy to function, the disruption in the banking system disrupted commodities markets, capital markets, and the real [more…]

Questions to Ask before Investing in Commodity Companies

You cannot completely eliminate risk in commodities markets, but you can sure take steps to help you reduce it. One way to minimize risk is to research all aspects of the investment you’re about to undertake [more…]

How to Check Out Commodity Managed Funds and Futures Contracts

Many investors buy on hype; they hear a certain commodity mentioned in the press, and they buy just because everyone else is buying. Buying on impulse is one of the most detrimental habits you can develop [more…]

How to Understand Commodity Fundamentals before Investing

Whether you decide to invest through futures contracts, commodity companies, or managed funds, you need to gather as much information as possible about the underlying commodity itself. This caveat is perhaps [more…]

Why You Should Diversify Your Commodity Holdings

One of the best ways to manage risk when investing in commodities is to diversify. This strategy applies on a number of levels: both diversification among [more…]

Commodities Investments: How to Determine Your Risk Appetite

Risk is perhaps the single greatest enemy you face as an investor in commodities. How wonderful would life be if you could have guaranteed returns without risk? Because that’s not possible [more…]

Are Commodities Only for the Brave?

Commodities have a reputation for being a risky asset. Many investors are simply scared of investing in this asset class. This fear is largely unfounded because, statistically, there’s no greater risk [more…]

The Pitfalls of Using Leverage with Commodities

In finance, leverage refers to the act of magnifying returns in the commodities markets through the use of borrowed capital. Leverage is a powerful tool that gives you the opportunity to control large [more…]

Effect of Government Financial Crises on Commodities and Stock Markets

In the era following the 2008 credit crisis, a more acute risk emerged for commodities: the sovereign government risk. This type of risk is more important than other types of risks because it involves [more…]

Risks and Benefits of Investing in Big Oil for Energy Commodity Exposure

Most oil companies have added non-petroleum energy sources to their product research mix, providing exposure to energy commodities of all kinds. These companies not only process crude oil into different [more…]

Risks with Commodity MLPs

Investing in commodities through master limited partnerships (MLPs) comes with a number of risks. Here’s a quick list of some of those risks so that you don’t come upon any surprises when you get your [more…]

Protecting Your Money and Your Identity Online

When you're buying and selling investments online, it pays to be extra careful to make sure your personal and financial information doesn't get stolen by cyberthieves. At the very minimum, you should protect [more…]

Checking Important Company Fundamentals before Investing in a Stock

Before you buy stocks, you have to do a little research on the companies you're thinking of investing in. Pay attention to the following key components when you look at a company's main financial statements [more…]

Financial Measures to Consider before Investing in a Stock

You're thinking of buying stock in a company, but before you invest your hard-earned money in hopes of a profitable return, check out some financial ratios that can help indicate whether the company is [more…]

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