Reckoning with Risk

My series on risk is available at these links: 
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7 comments

  1. […] construed) looks to “stay the course” through all times and seasons.  Thus it can only manage risk by adjusting one’s asset allocation and, even then, will only do so on account of non-market […]

  2. […] construed) looks to “stay the course” through all times and seasons.  Thus it can only manage risk by adjusting one’s asset allocation and, even then, will only do so on account of non-market […]

  3. […] Reckoning with Risk […]

  4. […] generally construed) looks to “stay the course” through all times and seasons. Thus it can only manage risk by adjusting one’s asset allocation and, even then, will only do so on account of non-market […]

  5. […] As suggested above, a portfolio’s results are largely dictated by overall market performance during the applicable time period. Thus the more risk-averse strategies will generate better returns in a difficult market by protecting the downside and the reverse will also tend to be true, managers with higher risk tolerances will be more likely to succeed during periods of strong market returns. The conventional method of dealing with this dilemma is to “risk adjust” the results, comparing nominal returns with volatility, but this approach is uncertain at best in that volatility and risk are hardly the same thing. […]

  6. […] As suggested above, a portfolio’s results are largely dictated by overall market performance during the applicable time period. Thus the more risk-averse strategies will generate better returns in a difficult market by protecting the downside and the reverse will also tend to be true, managers with higher risk tolerances will be more likely to succeed during periods of strong market returns. The conventional method of dealing with this dilemma is to “risk adjust” the results, comparing nominal returns with volatility, but this approach is uncertain at best in that volatility and risk are hardly the same thing. […]

  7. […] a dramatically disproportionate impact on retirement income portfolios. As so often happens, the risks are greater than we tend to […]

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