Risk is the potential that a chosen action or activity (including the choice of inaction) will lead to a loss (an undesirable outcome). The notion implies that a choice having an influence on the outcome sometimes exists (or existed). Potential losses themselves may also be called "risks". Any human ...

learn more… | top users | synonyms

5
votes
6answers
3k views

Conservative ways to save for retirement?

I was just wondering if there were any conservative ways to save for retirement. I am currently 24 years old and I started my first salaried job out of college a month ago. I am extremely conservative ...
0
votes
1answer
55 views

I provided personal information to a scam survey. What's my risk? [duplicate]

I filled out this survey to win a something. Then realized it was a scam. Felt really dumb. Anyhow, I gave my email, name, phone number and address. What can the do with the information I gave them?
2
votes
1answer
218 views

Which risk did I take winning this much?

This morning I made more than a thousand dollars on a position that the Japanese Yen was going to be strong. It seems that the estimate was correct, but I made much more money than expected. I more ...
1
vote
2answers
64 views

Is there a name for high risk / high returns debt funds in India?

I'm looking for debt funds in India that aim to give you high returns, at the cost of high risk. Is there a name for such a category of funds? I found one example of such a fund, Franklin India ...
2
votes
1answer
65 views

Is there any guarantee that index ETF will follow reference index?

As I understand: index ETF attempts to track value of some specific index. It may be done by either really buying index (physical ETF) or by creating some arcane financial instrument that is supposed ...
10
votes
3answers
947 views

Risks of using a “free” (non-fee-only) financial planner for investing a substantial sum?

I have a substantial (at least to me) amount of money from the sale of a second home. The money is momentarily in a savings account at a big branch bank in the US. The amount is such that I have ...
1
vote
3answers
194 views

Can putting someone else's Social Security Number on my credit cards hurt my credit score?

First of all, the other person would not get the physical cards (I would get the second card with their name, but destroy them upon receipt), so the balances should be safe. However, I'm unsure if ...
0
votes
1answer
131 views

High risk investment [closed]

I have a spare £500 I do not mind losing too much. But, I do not just want to throw it away. I have found high risk investments like this one from JP Morgan Chase, and over the past few years all ...
2
votes
1answer
115 views

How do I minimize my risk when loaning someone my car?

My wife and I recently had a third child, so we bought a minivan to replace her compact car. Since the car is over 10 years old with almost 150K miles, we know it won't bring us much money, so there ...
2
votes
4answers
88 views

How do you decide on your risk tolerance?

In investment, there is often a discussion of risk. Investors are told to assess their own risk tolerance, funds and derivatives often advertise their own expected risk, and brokers ask for your risk ...
1
vote
1answer
57 views

How do annual risks translate into long-term risks?

Suppose that the annual return of a 1 dollar investment has a standard deviation s and mean m. How does this translate into the risk of this asset over let's say 20 years? We may assume that annual ...
0
votes
2answers
82 views

Is it possible to know the probability that a trade is successful?

I'm trying to model the distribution of different outcomes of day trading every day for a year. I'm starting with $350 dollars. I'm only doing options trading on Apple stock with a 5% stop loss and a ...
-1
votes
1answer
78 views

What causes a stock to drop in price?

sorry for some minor grammar issues its late and I'm trying to get as much information for a class of mine. So what exactly is making the price of a stock to go down even though as an example through ...
13
votes
5answers
1k views

What is this type of risk-free investment called?

My mother told me that in 1994, she had $10K to put into a savings account or CD. She went to the local Citibank and didn't like the interest rates that they were offering on their savings/CD ...
1
vote
1answer
106 views

How can I compare the risk of different investing opportunities?

I have some money to invest and I consider different investing options. For instance I could: Let the money on a tax-free account 0.75% per year (the % can be changed by the state if inflation is ...
8
votes
3answers
979 views

Downside to temporarily lowering interest rates?

American Express sent me a promotional offer to lower the interest rate on my credit card for 12 months. I don't carry a balance on any credit cards. I can't think of a good reason to accept this ...
3
votes
3answers
90 views

How does investment on goods impact the risk of portfolio?

I really need good references to see what the impact of SRI (socially responsible investment) is on the portfolio risk. I have searched through a lot of books but nothing I found. Can you please give ...
1
vote
2answers
55 views

Do developed country equities have a higher return than emerging market equities, when measured in the latter currency?

Do developing country equities have a higher return and/or lower risk than emerging market equities, when measured in the emerging market's currency? Do you have data for this over a long timeframe (...
1
vote
2answers
69 views

What are the disadvantages to borrowing money for energy conservation measures / solar panels?

I am contemplating putting solar panels on my roof, as there is a collective buying of solar panels in my neighborhood going on. Special loans are offered by local government for solar panels or ...
85
votes
11answers
17k views

Why does the introduction of chip & pin appear to be so controversial in the United States?

The past few weeks there have been many news articles about the introduction of chip & pin in the United States; most of these articles are against it and citing such 'issues' as: "Some people ...
3
votes
2answers
140 views

Looking into investment bonds for the first time- what do I need to be aware of?

I have an ISA that has matured recently, and am now looking to reinvest that balance elsewhere. Given that most of the ways I usually save (current/ savings accounts, regular savers, ISAs, etc) aren't ...
3
votes
1answer
148 views

How to measure systematic risk of a stock?

Is there any indicator or measure which can be used to determine the degree of corellation of a stock with the broader market. I like to find stocks which are least bothered by either bull or bear run ...
0
votes
1answer
52 views

Are bond ETFs considered low risk in this market?

I'm thinking about moving my money to an automated management service. I've set my risk profile to 3.5 (low) which means they would invest around 35% in bond ETFs. With today's interest rates being ...
0
votes
2answers
110 views

New to options trading and need help understanding an options spread risk graph. What am I missing?

Suppose the stock is $41 at expiry. The graph says I will lose money. I think I paid $37.20 for (net debit) at this price. I would make money, not lose. What am I missing? Thanks for all your input, ...
1
vote
1answer
180 views

Is my car overinsured if my net worth is high enough?

My net worth is approx. 200k (distributed in checking for emergency, bonds indices for bigger emergency, and stocks for retirement) and I make between 15k-35k per year (it varies). I've been accident-...
9
votes
3answers
383 views

Should ETF currency risk be avoided by changing denomination or selling in a different currency?

I am about to purchase international stock and bond ETFs as part of my retirement portfolio. I am concerned about currency denomination. Suppose that I purchase an ETF in Euros and when I start ...
1
vote
1answer
194 views

What happens after a counterparty defaults on a derivative trade?

I understand that counterparty risk, or the risk of the counterparty defaulting when they lose on a bet, is inherent when trading derivatives. My question is what happens after they default? Is there ...
7
votes
2answers
283 views

What fraction of a portfolio should P2P lending comprise?

Based on what I understand, traditionally we are supposed to put 70% money in stocks and 30% money in bonds (based on individual age, I am 33 right now). I have been experimenting on P2P lending and ...
3
votes
3answers
143 views

Fundamentals of creating a diversified portfolio based on numbers?

There are a number of articles and posts across the internet describing how to diversify your portfolio. But, each claim typically focuses on how to allocate your portfolio rather than describing ...
-1
votes
1answer
83 views

How does a person with a large equity in a company hedge his risk

How people like Bill Gates , who has the bulk of their wealth tied up in MSFT shares, hedge their downside risk in case the share price tanks? If he were to buy put options like the rest of us, it ...
2
votes
1answer
334 views

What happens if futures contract seller defaults?

I'm considering buying a put future to hedge against interest rate increase. I know there is a certain level of protection from default as required by the contract, but I assume the risk is not zero. ...
-2
votes
3answers
178 views

What are the real risks in “bio-technology” companies?

Biotechnology companies are often in the top 10 of the most lucrative businesses in a market. For example on Friday 13th march, the company I am interested in was among the best performers of the day ...
1
vote
2answers
147 views

What is the standard deviation and mean return of oil?

Let's use WTI. I'd like to add oil to my portfolio, and I was wondering how much I should have. I'm in 60-70% index and 40-30% individual value stocks. I want to cut back on my value plays and add ...
0
votes
2answers
58 views

Risk and reward of a synthetic option position

I am trying to understand option synthetics. This article mentions: For example, if your stock is at $100 per share and the you sell a 105 Call and buy a 105 Put, you have zero risk (and zero ...
0
votes
4answers
854 views

Is it smart to only invest in mid- and small-cap stock equity funds in my 401(k)?

Historically, mid-cap and small-cap company stocks have outperformed the market. Correct? Since I'm not going to touch the money in my 401(k) in over 40 years, wouldn't it make sense to invest ...
6
votes
5answers
6k views

Why I cannot find a “Pure Cash” option in 401k investments?

I am of an opinion that I should decide where my money should get invested and if it should get invested at all or not. When I looked at the investment options I have with my 401k money, I figured ...
1
vote
3answers
221 views

how derivatives transfer risk from one entity to another

In his book 'options, futures and other derivatives', John hull writes: Derivatives such as forwards, futures, swaps, and options are concerned with transfer- ring risk from one entity in the economy ...
0
votes
3answers
248 views

Is this trick enough to totally prevent bankrupcy in a case of a crash?

I have a trading scheme that is very profitable but is also really dangerous because it opens a lot of trades at the same time with high leverage and else. So the trick is to open only short (sell) ...
1
vote
1answer
204 views

Why are U.S. Treasury interest rates are so low vs. other nearly risk-free rates?

I was reading Options,Futures and Other Derivatives by John Hull and I came across the question: Why are US Treasury rates significantly lower than other rates that are close to risk-free? I ...
5
votes
3answers
240 views

Why does financial investor bother to buy derivatives and then hedge the position?

I am recently studying mathematical finance, and I am not really familiar with how the financial system works. This might be a naive question: when reading some books on mathematical finance, "hedging"...
1
vote
2answers
289 views

How do companies protect employees' income from currency flucturations? [closed]

Say you are an export-oriented company, selling products abroad and receiving income in some (nominally stable) basket of currencies. Now let's suppose your own domestic currency, the one you use to ...
3
votes
1answer
62 views

Risks in investing savings into retail superannuation in Australia?

What risks are there if I invest all my savings into retail superannuation? I'm still working part time, in my 60s, but would like to get a regular (pension type) income tax free, from investing in a ...
1
vote
2answers
131 views

Any strategies to screen high risk, hopefully high reward stocks? [closed]

Can't seem to find anything geared towards that. Looking to allocate a small proportion to such stocks.
2
votes
1answer
1k 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
103 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?
0
votes
1answer
97 views

Are index trackers subject to insolvency risk?

If I invest my money in a bank account, the bank could go bankrupt and I could lose all my money - well, at least I could have in the distant past, before government deposit insurance was invented. ...
7
votes
10answers
3k 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 ...
1
vote
0answers
62 views

Setting and measuring risk profile target for retirement account

I understand that as you age you want to slowly lower the risk profile of your retirement account, but how should I determine how much risk I should take on currently and how do I measure how much ...
1
vote
1answer
54 views

What to know before purchasing Individual Bonds?

What are the different factors and terms one should be acquainted with before investing in individual bonds? I'm currently looking at: It's all rather foreign to me though. When I look at this page ...
4
votes
1answer
823 views

Should I be more aggressive in a Roth IRA, 401k, or taxable account?

I presently have a mix of Vanguard funds spread throughout taxable and non-taxable accounts. Some advisors claim it's better to take risk in the taxable accounts while placing bonds in the IRA. ...