0
votes
1answer
85 views

Why does shorting a call option have potential for unlimited loss?

Referring to http://en.wikipedia.org/wiki/Option_(finance), for a short call: If the stock price increases over the exercise price by more than the amount of the premium, the short will lose ...
1
vote
1answer
44 views

How to manage currency risk in international investing

Exchange rate fluctuations can wipe out or augment your return from a foreign stock investment. Is there any way to protect yourself from such risk?
8
votes
10answers
2k views

Ideal investments for a recent college grad with very high risk tolerance?

I recently graduated college and got a steady job making decent money as a software engineer/programmer. I make more than enough money to sustain myself and save up money, while still having money ...
2
votes
1answer
140 views

How to evaluate investment risk in practical terms

I've seen previous questions about risk here and here, as well as read some stuff in books about similar ways of assessing risk. However, as discussed in one of those questions, a lot of the ...
4
votes
3answers
131 views

Is there any reason to diversify your investments across accounts at multiple/different brokers?

I have a few retirement accounts at Vanguard. I am considering opening a regular non-retirement investment account there. Is there any reason to diversify and open the new account with a different ...
1
vote
2answers
434 views

When to start investing in an index fund? Wait for a bear market, use dollar cost-averaging, or another approach?

I think index funds are one of the best investment tools for the defensive investor. Still, when should one start investing money in an index fund? It could result in a loss to get in at the top of a ...
5
votes
1answer
261 views

Should my retirement portfolio's asset allocation become more conservative over time?

It seems to be common advice that a retirement portfolio should be invested aggressively when one is young, and conservatively when one is older and closer to retirement. Is this good advice? ...
2
votes
2answers
263 views

How much lump sum investment in stocks would be needed to yield a target stable monthly income?

Situation: a guy has a lot of money. He wants to invest in stable and low risk stocks so that he could get a steady 1000$ a month income at least for the next 10 years (and having equal or bigger ...
6
votes
1answer
561 views

How do small cap stocks perform vs. large cap stocks (like Dow constituents) during bear trends?

Does anyone have any good information on how small cap stocks, e.g. < $500M, perform during bear trends and/or recessions in comparison to large cap stocks like the Dow Jones Industrial Average ...
3
votes
2answers
261 views

What's the least risky investment for people in Europe?

I have a few thousand euros in a bank deposit and I was wondering where I should invest them, considering that I won't want to take much risk? I am ready to accept the lower ROI than investing the ...
9
votes
1answer
236 views

What are the risks in buying a property from a “Tax Deed” auction?

Recently, I was approached by a friend of my wife's, and she said that she and her husband were making a lot of money bidding on properties that went up for sale in our area, at auctions like this ...
2
votes
3answers
105 views

Can the risk of investing in an asset be different for different investors?

If 2 people invest the same amount in the same asset at the same time, will their risk be different if they use different risk management strategies? Say Inventors A and B both buy 1000 shares in ...
3
votes
5answers
1k views

Investing in dividend-yielding stocks with money borrowed from margin account?

I am getting ready to invest some of my savings in a stock brokerage account. The well-known brokerages, e.g. ETrade, Ameritrade, etc, have relatively high margin interest rates for the level I am ...
5
votes
3answers
1k views

Safer investing (401k/savings) assuming there will be another banking crisis?

Assuming one or more of the big investment banks incurs unsustainable investment losses leading to another banking crisis, what is the safest place to invest my 401k?
3
votes
2answers
306 views

How to analyze risk of a bond?

If given the screen below as an example, how would you analyze the risk of a bond? I am not sure what to look for to know if this is a good investment. What risk factors should be considered when ...
7
votes
4answers
1k views

How to convince someone they're too risk averse or conservative with investments?

I have a friend who is very risk-averse, by self admission. By my standards he is too much risk averse for his own good. He says that his personal experience over the last 15-20 years taught him that ...
2
votes
1answer
617 views

Tax lien investing: Possible in Canada?

I was just reading on the tax lien investing process and how it works in the United States. I was wondering if it happens in other countries. In specific, I would like to know if it happens in Canada ...
0
votes
4answers
201 views

Is it possible to quantify the probability of sudden big movements for a high-volume stock?

As an example: Over this past weekend, from Friday close to Monday open, Netflix (NFLX) dropped about 36% in stock price. Going back to July, Netflix was trading near $300, and now it is at about ...
7
votes
4answers
847 views

How do you quantify investment risk?

It's obvious that investing in stocks and bonds is not a guaranteed return--there is some risk, and this is well known. People talk about risk averse investors or riskier ones, or that one should ...
8
votes
1answer
423 views

How do I minimize the risk of my investment losing value?

I am wondering what type of investment offers the least amount of overall risk. I know that Money Market accounts and CD's offer a low risk of reducing the principal. But they earn such low rates that ...
2
votes
3answers
145 views
5
votes
3answers
309 views

Do large market players using HFT make it unsafe for individual investors to be in the stock market?

Similar to this question, but with new information concerning High Frequency Trading [HFT], see articles on HPCwire and the NY Times citing that HFT accounts for 73 percent of all equity trading ...
6
votes
4answers
902 views

Investing in foreign CDs, is it worth the risk?

I heard Clark Howard talking about foreign currency CDs, and so I looked and indeed their interest rates are much higher than US rates right now (3.75% for a year in Australia). What risks are ...