inancial stock market investing returns are often linked to high risks.
Of course, in investing, past returns are not a guarantee of future returns. Therefore, it is better to talk about expected risk and expected return.
The risk of an investment is often tied to variables such as variance of past returns, which could be over a year, or shorter or longer, depending into how long into the future your projecting past variance.
With increased variance, the models bring with it a chance that the outcome will be highly positive, meaning highly positive return.
In stock market, these high variance companies are often operating in areas where there is not much historical operating data, and thus the profitability and thus valuations (via P/E and other metrics) might change radically from year to year.
However, if you diversify your holding in these high variance companies, a theory called Modern Portfolio Theory has shown that you can achieve the same level of return with decreased levels of risk.
With diversification, you decrease the level of risk associated with individual companies, leaving only market based risk when a certain level of diversification is achieved.
April 1st, 2010 at 5:44 pm
very good insight, I really enjoyed reading this, keep it up!
May 8th, 2010 at 9:55 pm
Man what a week for the markets! I have been trading for over 20 years and have never seen the market take a dive like this week. I hope the investigation shows what happened. Funny thing though, I thought there were circuit breakers that suspended trading for a bit to let the markets settle down after a large point drop.
May 20th, 2010 at 8:01 pm
I have read a few of the articles on your website now, and I really like your style of blogging. I added it to my favorites web page list and will be checking back soon.
May 21st, 2010 at 10:27 pm
I have read a few of the articles on your website now, and I really like your style of blogging. I added it to my favorites web page list and will be checking back soon. Please check out my site as well and let me know what you think. Thanks.
May 24th, 2010 at 3:04 am
Thanks for the nice post…
May 24th, 2010 at 3:49 am
I’ll gear this review to 2 types of people: current Zune owners who are considering an upgrade, and people trying to decide between a Zune and an iPod. (There are other players worth considering out there, like the Sony Walkman X, but I hope this gives you enough info to make an informed decision of the Zune vs players other than the iPod line as well.)
May 24th, 2010 at 11:58 am
I believe you might like what I came across on this internet site today.
May 28th, 2010 at 1:27 pm
Howdy there,just identified your web-site when i google something and wonder what hosting do you use for your wordpress,the speed is more faster than my website, i really need to know it.will back to check it out,i appreciate it!
May 29th, 2010 at 10:39 pm
You did a good job.
May 30th, 2010 at 1:01 am
Sorry for the huge review, but I’m really loving the new Zune, and hope this, as well as the excellent reviews some other people have written, will help you decide if it’s the right choice for you.
May 30th, 2010 at 3:12 pm
that’s incredible.
May 30th, 2010 at 3:58 pm
Sorry for the huge review, but I’m really loving the new Zune, and hope this, as well as the excellent reviews some other people have written, will help you decide if it’s the right choice for you.
June 4th, 2010 at 10:22 pm
I have tried that and it did not work. Any advice?
June 5th, 2010 at 4:05 pm
that’s incredible.
June 7th, 2010 at 4:30 pm
I have to eliminate the European Currency. Is there an alternative?
June 8th, 2010 at 4:49 pm
Is there an alternative? I need to get out of the Euro.
June 10th, 2010 at 9:46 pm
Hi,good article,thanks for your share! and I wonder if i can quote this post in my site if I put a link back to yours? Waiting for your answer!
June 11th, 2010 at 9:17 pm
Wo…Nice Blog, Nice tips, Great article!, I have recently started a blog, the information you provide on this site has helped me tremendously. Thank you for all of your time & work
June 12th, 2010 at 11:13 am
Haha, I am quite interested in your site. If I were to use this website, I could earn you 100-200 USD daily. I am willing to work on monetizing your site, on the condition that you share 50% of revenues with me. If you are interested, please send me an email
June 14th, 2010 at 7:11 am
you are a great help.
June 14th, 2010 at 4:00 pm
you have a good sense of humour.
June 14th, 2010 at 8:34 pm
bad credit remortgage…
I saw this really good post today……
June 15th, 2010 at 10:20 pm
you have a good taste.
June 16th, 2010 at 3:44 am
fantastic post as usual!
June 16th, 2010 at 12:47 pm
I’m wondering, what is the best strategy to invest 20′000.- USD?
June 17th, 2010 at 1:32 am
Good article and this website helped me a lot in my college assignment. Keep it up.
June 19th, 2010 at 3:34 am
Please, can you PM me and tell me few more thinks about this, I am really fan of your blog…
June 19th, 2010 at 5:48 am
You wouldn¡¯t believe it but I¡¯ve wasted all day digging for some articles about this. You¡¯re a lifesaver, it was an excellent read and has helped me out to no end. Cheers,
June 30th, 2010 at 2:57 pm
thanks to your ideas , i¡¯d adore to adhere to your weblog as usually as i can.possess a good day
July 1st, 2010 at 2:37 pm
Great blog post.Really looking forward to read more.