Degrees of Investment Risk

Risk evaluation goes beyond statistical numbers, such as standard deviation. That’s a fancy term used by financial pros looking at investment portfolios.

                       

Standard deviation need not concern individual, everyday, non- professional investors. But if you want to know, it’s the return you get from gains and losses you may expect about two thirds of the time over a year.

                       

A well designed portfolio will consider your acceptable risk or 'risk tolerance.' Your investment time objective, age, personal psychology and investment goals are other considerations.

                       

To avoid basic investment risk, seek out low-cost, un-managed mutual funds or exchange-traded-funds (ETFs), those indexed to foreign and domestic standards you want to emulate. One example would be the S&P 500. (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)