Assessing Risk

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How to Minimize Your Risk by Diversifying Your Stock Investments

Diversification is a strategy for reducing stock risk by spreading your money across different investments. It’s a fancy way of saying, “Don’t put all your eggs in one basket.” But how do you go about [more…]

How to Weigh Risk and Return in Stock Investments

How much risk is appropriate for you in your stock investments, and how do you handle it? Before you try to figure out what risks accompany your investment choices, analyze yourself. Here are some points [more…]

How Market Capitalization Affects Stock Value

You can determine a company’s value (and thus the value of its stock) in many ways. The most basic way is to look at the company’s market value, also known as market capitalization [more…]

How to Invest for the Short Term

When it comes to investing in stocks, short termgenerally means one year or less, although some people extend the period to two years or less. Short-term investing isn’t about making a quick buck on your [more…]

How to Invest for the Intermediate Term

Intermediate term refers to the financial goals you plan to reach in two to five years through your investing. For example, if you want to accumulate funds to put money down for investment in real estate [more…]

How to Invest in Stocks for the Long Term

Stock investing is best suited for making money over a long period of time. Usually, when you measure stocks against other investments in terms of five to [more…]

How to Invest in Stocks for Steady Income

Not all investors want to take on the risk that comes with making a killing through stocks. (Hey . . . no guts, no glory!) Some people just want to invest in the stock market as a means of providing a [more…]

How to Invest Based on Your Personal Style

Your investing style isn’t a blue-jeans-versus-three-piece-suit debate. It refers to your approach to stock investing. Do you want to be conservative or aggressive? Would you rather be the tortoise or [more…]

Introduction to Financial Risk in Stock Investments

The financial risk of stock investing is that you can lose your money if the company whose stock you purchase loses money or goes belly up. This type of risk is the most obvious because companies do go [more…]

Introduction to Interest Rate Risk in Stock Investments

You can lose money in an apparently sound stock investment because of something that sounds as harmless as “interest rates have changed.” Interest rate risk may sound like an odd type of risk, but in fact [more…]

Threats of Interest Rate Risk in Stock Investments

Historically, rising interest rates have had an adverse effect on stock prices and investments. Because the United States country is top-heavy in debt, rising interest rates are an obvious risk that threatens [more…]

Introduction to Market Risk in Stock Investments

When they talk about investing in stocks, people talk about the market and how it goes up or down, making it sound like a monolithic entity instead of what it really is — a group of millions of individuals [more…]

An Introduction to Inflation Risk in Stock Investments

Inflation can be a risk that stock investors have to deal with. Inflation is the artificial expansion of the quantity of money so that too much money is used in exchange for goods and services. To consumers [more…]

An Introduction to Political and Governmental Risk in Stock Investments

Government rules and regulations are important considerations when making investment decisions. If companies were fish, politics and government policies [more…]

An Introduction to Personal Risks in Stock Investments

Frequently, the risk involved with investing in the stock market isn’t directly related to the investment; rather, the risk is associated with the investor’s circumstances. [more…]

An Introduction to Emotional Risks in Stock Investments

What does emotional risk have to do with stock investments? Emotions are important risk considerations because investors are human beings. Logic and discipline are critical factors in investment success [more…]

An Introduction to Volatility in Stock Investments

How often have you heard a financial guy analyzing stock investments on TV say, “Well it looks like a volatile day as the markets plunge 700 points. . . .”? Volatility has garnered a bad reputation because [more…]

Minimize Risk in Stock Investments through Knowledge, Practice, and Preparation

Now, before you go crazy thinking that stock investing carries so much risk that you may as well not get out of bed, take a breath. Minimizing your risk in stock investing is easier than you think. Although [more…]

Swing Trading Risks

Swing trading is risky and demands a great deal of time. As a swing trader, you must monitor the market during every trading hour. You also must be able to control your emotions so you stay focused and [more…]

The Risks of Trading in the World Money Market

Leverage, which means borrowing money to trade, is the number one risk to your portfolio when trading in money markets. Success on the foreign currency exchange market means having to trade in large sums [more…]

What Is a Hedge Fund?

In the investment world, "I run a hedge fund" has the same meaning as "I'm a consultant" in the rest of the business world. In general, a hedge fund is a private partnership that operates with little to [more…]

Speculative Risk and Commodities Investments

Similar to the bond or stock markets, the commodities are populated by traders whose primary interest is making short-term profits by speculating whether the price of a security will go up or down. [more…]


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