Questions tagged [risk-management]

Risk management is the process of identification, analysis and acceptance or mitigation of uncertainty in investment decisions.

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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 has ...
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Understanding Interest Rate Risk: What is it, and what techniques do I use to minimize it?

I'm looking to develop a fixed-income account of bonds and dividend-paying equities. I've heard that bonds are susceptible to interest rate risk, but I don't really understand what that means. What ...
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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 ...
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Brainstorming: Homebrew “credit” card?

In response to another question (about how to make credit cards pay interest on any positive balance), I came up with an odd combination: Get an account with both a debit card and a linked overdraft-...
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Do the rewards of custom contract size in OTC derivatives justify the counterparty risk?

If I decide to trade OTC derivatives, I take on counterparty risk. Since the transaction is not overseen by a clearing house/firm, I accept the risk that the counterparty may not honour the obligation....
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What's the role of commodities in a IRA portfolio?

People keep talking about percentage of stocks vs bonds to manage risk when building a personal investment portfolio. What's the role that commodities have in managing risk when building an IRA ...
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225 views

Does anyone know where I can find a free efficient frontier tool, or an informative and legitamate/academic graph of the efficient frontier?

I'd like to build a portfolio based upon modern portfolio theory and I'd like to find a tool I can use to calculate the proper mix of asset classes. Can anyone help with this? I think a good chart/...
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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) ...
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How is the Efficient Frontier drawn?

I know efficient frontier is the collection of expected return on a portfolio and the level of risk(e.g. standard deviation). What I don't understand is that is the efficient frontier really drawn ...
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1answer
2k views

When to liquidate mutual funds for a home downpayment

I have about $18k in mutual fund assets that I am planning to use for a down payment on a home within the next 1-2 years. Combined cost basis for the assets in question is +$2,800. Right now the asset ...
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Forward Contract Extension

I was reading this article Below is a small snippet from the article. I'm wondering how Barrick gold could extend the hedge at its own option. How would this be executed and how do they have this ...
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Does long term asset growth really converge to that derived from compound interest formula?

Many websites/experts claim that the longer you hold your assets, the likelier your asset's return is closer to that predicted by the compound interest formula. However, some other experts claim ...
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What is the theory behind Rick Van Ness's risk calculation in the video about diversification?

In the video, Rick Van Ness states the following scenario: Stock A has a 7% return with +/- 1% risk Stock B has a 3.5% return with +/- 0.5% risk Stock A and B are perfectly negatively correlated. A ...
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Is there an advantage to international stock diversfication?

I'd like to reduce my risk of investing solely in the U.S. stock market compared to the rest of the world. However, my concern is that perhaps the U.S. stock market already has such international ...
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Is socialtrend.com or/and feelthetrend.com legitimate?

I'm not particularly literate about finance and market. One of my friend invited me in a 1-hour meeting about this Social Trend marketing of TheTrendSocial.com. Apparently buying one of their "kit" ...
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How to LAY/SHORT SELL multiple mutually exclusive outcomes in sequential events?

(n.b. Still not sure if this is the right place, but it was suggested by @SRKX) How would I calculate the percentage of my wealth to invest when LAYING/SHORT SELLING multiple mutually exclusive ...
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What proactive measures can be taken before or when a lender closes your credit card?

A blogger and contributor here recommended Digital Federal Credit Union (DCU) as a possible lender in my search for cash secured credit cards to establish my credit history, and I got approved for one ...
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What should I do with the stock from my Employee Stock Purchase Plan?

I've got an employee stock purchase plan program. The details are a little tricksy, but I basically get to buy about 2500 shares of company stock at something like $2.33/share... and the stock has ...

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