Investing means taking a certain amount of risk in order to achieve your financial goals. There are distinct categories and types of risk investors contend with, including systematic and unsystematic ...

The Treynor ratio and the Sharpe ratio are financial metrics that use different approaches to evaluate the risk-adjusted returns of an investment portfolio. The Treynor ratio employs beta and measures ...

Here at Investopedia, we emphasize the importance of prudent investing—put at stake only what you can afford to lose and ensure your choices align with your financial goals and risk tolerance. This ...

Investing is a balancing act between risk and reward, where the aim is to take on types of risks that offer proportional returns. In this game, not all risks are created equal — some come with the ...

The Treynor ratio is a tool in portfolio analysis that helps investors assess how well a portfolio compensates them for taking on market risk, also known as systematic risk. This portfolio ratio shows ...

(January 2006) I’m a firm believer in risk management. That’s a bit like saying “I’m a firm believer in breathing.” We are all risk managers whether we admit it or not. And if that’s the case, I’d ...

Not all portfolio risks carry their just rewards. Here's how to develop your risk budget. There are generally two steps to forming a portfolio. Step 1: Decide how to divide the portfolio among various ...

For equity-oriented products, there are two well-known risks known as unsystematic risk and systematic risk. While investing in a market-linked product like mutual funds, one has to first understand ...

Investing is all about striking the right balance between risk and return. There are different types of risks in the stock market and there are ways to mitigate them. All investors naturally want to ...