You can also use options to help manage certain
types of portfolio risk.
Not exact matches
From an investment
portfolio that is filled with different
types of investments that «might» make money, in spite
of their high
risk, to a home that is filled with all the latest and greatest «stuff,» rich people avoid over-complication.
There is no reason to take this
type of concentrated
risk in a
portfolio; the investment opportunity set is just too big and readily available to justify being anything but well - diversified.
As always, more return leads to more
risk but by spreading out your
portfolio over a number
of different assets you can continue to decrease your
risk of holding only one
type of investment.
Fairfax subsidiaries provide a full range
of property and casualty products, maintaining a diversified
portfolio of risks across all classes
of business, geographic regions, and
types of insureds.
The analytics tab includes charts to help you identify different
types of risk or diversification opportunities within your
portfolio.
Diversification may not always protect against losses, but a balanced
portfolio that includes these three
types of investments may be more insulated from
risk and less impacted by market gyrations.
«I seek to construct a
portfolio that is both highly concentrated, yet also diverse in terms
of industries,
types of value, catalysts, and
risk» Whitney Tilson
There are four
types of analyst:
portfolio managers, fund managers, ratings analysts, and
risk analysts.
The firm writes that even though SWFs have been successful in private markets, many reported ongoing internal debate as to whether the return premium is fair compensation for the
risks these
types of investments add to the
portfolio.
Learn about how overall
portfolio risk can be reduced by adding a variety
of different
types of bond ETFs to a primarily stock
portfolio.
Instead
of the weights
of different
types of bonds, investors can hone in on exposure to factors that drive
portfolio performance, such as interest rate
risk, credit
risk, and others.
- retirement savings and income - Pre-59 1/2 72t Calculations (avoiding penalty tax)- college savings and 529 plan illustrations - college cost and tuition data - Coverdell education savings -
risk profile questionnaires and quizes - model portfolio illustrations - asset allocation and portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield calculat
risk profile questionnaires and quizes - model
portfolio illustrations - asset allocation and portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio illustrations - asset allocation and
portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio optimization -
portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio management and value tracking - 401 (k) retirement savings - Cost
of waiting to save - Effect
of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical
Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Performance - Impact
of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all
types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model
Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation
of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates -
Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Allocation Rebalancing -
Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Optimization and «Advice» -
Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator -
Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield calculat
Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield calculations
Beta Coefficient
of a mutual fund / stock /
portfolio is a measure
of the
risk that shows up when the mutual fund / stock /
portfolio is exposed to different
types of market conditions like an up market, down market, recession, etc..
- retirement savings and income - Pre-59 1/2 72t Calculations (avoiding penalty tax)- college savings and 529 plan illustrations - college cost and tuition data - Coverdell education savings -
risk profile questionnaires and quizes - model portfolio illustrations - asset allocation and portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield calculat
risk profile questionnaires and quizes - model
portfolio illustrations - asset allocation and portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio illustrations - asset allocation and
portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio optimization -
portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio management and value tracking - 401 (k) retirement savings - Cost
of waiting to save - Effect
of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical
Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Performance - Impact
of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all
types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model
Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation
of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates -
Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Allocation Rebalancing -
Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Optimization and «Advice» -
Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator -
Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield calculat
Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield calculations
One way to lower your overall
risk is by diversifying your
portfolio, not just by investing in different stocks, but by considering different
types of assets like CDs or bonds.
To the extent a
portfolio focuses on particular countries, regions, industries, sectors or
types of investment from time to time, it may be subject to greater
risks of adverse developments in such areas
of focus than a
portfolio that invests in a wider variety
of countries, regions, industries, sectors or investments.
Once you've identified your
risk tolerance, investment goals and time horizon, you can set about deciding what
types of assets will work best in your
portfolio.
The idea behind asset allocation is that because not all investments are alike, you can balance
risk and return in your
portfolio by spreading your investment dollars among different
types of assets, such as stocks, bonds, and cash alternatives.
Still, aggressive stocks are best suited to investors who can accept substantial
risk in the portion
of their
portfolios that they devote to these
types of investments.
By adjusting the percentage
of asset
types as part
of your investment
portfolio management, you can vary the amount
of risk you are exposed to and the potential return on your
portfolio.
How many stocks you want to own is a function
of how many companies you can keep track
of; how much income you want to have at
risk from any one company; whether you want a «core and satellite»
type of portfolio; and so on.
Basic
Types of Portfolios In general, aggressive investment strategies - those that shoot for the highest possible return - are most appropriate for investors who, for the sake
of this potential high return, have a high
risk tolerance (can stomach wide fluctuations in value) and a longer time horizon.
All the software we have built in the past 20 years — the order
types and trading algos, account management, research,
risk analytics, performance reporting,
portfolio modeling and rebalancing tools — are all available to our customers free
of any extra charge.
To the extent a
portfolio focuses on particular countries, regions, industries, sectors or
types of investment from time to time, it may be subject to greater
risks of adverse developments in such areas
of focus than a
portfolio that invests in a wider variety
of countries, regions, industries, sectors or investments.
Prior to the emergence
of this new product
type, few could access some
of the exposures these funds offered, nor capitalize on the
risk - adjusted return benefits
of including them in a
portfolio.
The other
type of person who tend to have simple
portfolios are those who have an extreme aversion to
risk.
You can create different
types of portfolios: by the market (stock, precious metals, commodity and raw materials futures, Forex); by countries (USA, EU, Russia) and by other categories, also by
risk level and profitability.
Instead
of the weights
of different
types of bonds, investors can hone in on exposure to factors that drive
portfolio performance, such as interest rate
risk, credit
risk, and others.
Types of Investment
Risk Importance
of Diversification Know Your Investment Horizon Different
Types of Fund Categories How to Choose a Fund That Fits Your
Portfolio Use an Investment Checklist
For more information on the
risks involved in investing in such investment
portfolios, and the
type of investor for whom each investment
portfolio may be appropriate, read the Disclosure Booklet (PDF).
Portfolio + offers investors options for either income or growth within three pre-determined
risk levels across four different
types of accounts: ISA, SIPP, fund account or Junior ISA.
Different
types of investments involve varying degrees
of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client or prospective client's investment
portfolio nor that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Portfolio Solutions ®), will be profitable or equal any historical performance l
portfolio nor that the future performance
of any specific investment or investment strategy (including those undertaken or recommended by
Portfolio Solutions ®), will be profitable or equal any historical performance l
Portfolio Solutions ®), will be profitable or equal any historical performance level (s).
Learn about how overall
portfolio risk can be reduced by adding a variety
of different
types of bond ETFs to a primarily stock
portfolio.
To the first point: are the errors
of the innocuous, ever - present
type found in a large lender's
portfolio, or egregious underwriting errors knowingly committed to increase production while offsetting
risk through the FHA program?
Considering the «combined expectations for low asset returns and the unavoidable reality
of downside
risk in a highly uncertain global political and economic climate,» investors
of all
types are looking for new ways to diversify their
portfolios, according to a new analysis from Willis Towers Watson, «Breaking the Style Box.»
Even though a mutual fund diversifies its
portfolio to reduce
risk, they may eventually invest in a single
type of asset.
Like any
type of investing, there are inherent
risks when it comes to investing money with robo - advisors — the value
of your
portfolio can decrease and may even fall sharply at times.
As long as you understand the different
types of fund categories — you'll know how a fund invests your money, the
risks involved, and how it fits in your
portfolio.
Private equity investors use this
type of investment to add diversification to their
portfolios and expect higher than average returns than those
of traditional equity investments, because they are taking on bigger
risks to achieve potentially higher returns.
The above examples were to help illustrate for you the
risks of each
type of portfolio.
Distributing your funds between different
types of investments helps you avoid systemic
risk (which impacts the economy as a whole) and non-systemic
risk (which affects a small portion
of the economy or one company in your
portfolio).
So if you have your investments spread across a wide range
of asset
types, then you reduce the
risk to your
portfolio overall.
Experienced
risk managers The lead
portfolio manager is skilled in shorting and has a background managing long / short hedge funds, making him well - suited to manage this
type of strategy.
MBIA minimizes its exposure to interest rate
risk through active
portfolio management to ensure a proper mix
of the
types of securities held and to stagger the maturities
of its fixed - income securities.
Diversification may not always protect against losses, but a balanced
portfolio that includes these three
types of investments may be more insulated from
risk and less impacted by market gyrations.
I'm not a GSE analyst to ponder on their insolvency; the black magic
of the short - term market is in the instant transfer
of any
type of risk of the underlying assets into the credit
risk of a money fund
portfolio as a whole.
Given all the different
types of bonds, and the
risks inherit in each, you can mitigate some
of the
risk by diversifying your bond
portfolio.
Technically, it means something along the lines
of an investment fund (either public or private) which attempts to hedge the
risks of its
portfolio, by carefully considering what
type of investments it purchased.
In other words, you have diversified your
portfolio to mitigate the
risk associated with a concentration in just one
type of security.