Risk Management – Key to Investing No One is Talking About
You know, there is a key element of investing that NO ONE seems to be talking about – risk management. So, how does this element of investing play a BIG role in investing successfully? Roland and Lindsay discuss how identifying opportunities for risk management in your plan is crucial to helping invest successfully.
Risk management is the process of identification, analysis, and acceptance or mitigation of uncertainty in investment decisions. Basically, wouldn’t investing seem less intimidating, if you felt like you could minimize the risk your portfolio was exposed to. The ugly truth is that risk is inseparable from getting returns in the investment world. But, investors or fund manager can analyze and attempt quantify the potential for losses in an investment.
Risk is inseparable from return in the investment world.
A variety of tactics exist to ascertain risk; one of the most common is standard deviation, a statistical measure of dispersion around a central tendency. Beta, also known as market risk, is a measure of the volatility, or systematic risk, of an individual stock in comparison to the entire market. Alpha is a measure of excess return; money managers who employ active strategies to beat the market are subject to alpha risk.
Then take the appropriate action based on the investors objectives and risk tolerance. Of Course, there are a variety of tactics to ascertain risk. At Roland Financial we are a Tactical Management Firm which makes us different in how we look at risk when managing investments. We look to allocate capital that gives the highest potential of gain.
By investing in companies and industries that are not only doing well currently, but perhaps in the near future.
Planning for a retirement you really want can be tricky. We encourage you to give us a call us today & schedule a complimentary visit. We’ll help with any questions you may have so that your retirement meets your specific needs. You can reach us at 833-2999 that’s 833-2999.
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