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Risk Investment Analysis
In a quality investment guide risk assessment, a key principle, will be addressed. If we are to be successful in our investment endeavors and to ensure that we have a portfolio that is going to provide us with consistent rewards we must fully understand risk and how it applies to our personal character as well as our portfolio structure. Risk is something that we deal with in almost every aspect of our life. And we as a society are very aware of risk and do many things to reduce risk in our lives. We will purchase health, auto and life insurance. We make sure that all our children are using seat belts and helmets under certain conditions. We will check out the prospective of a company before submitting a resume. There are many more things I can point out but what is amazing is that a majority of the time when it come to investing we do not complete an investment risk assessment. So many investors fail to identify or measure the risk involved, instead they look for the maximum rewards. In fact this is one of the biggest mistakes that is made by investors both novice and experienced. A portfolio should not be structured around the maximum reward instead it should be structured around the highest amount of reward with the least amount of risk. A portfolio built on a strategy of highest return vs. lowest risk is what leads to a successful portfolio that will help you accomplish your personal investment goals. This is why rather then focus on maximum returns the smart investor focuses on Return vs. Risk. But part of that formulation is also understanding what risk is and knowing what your personal risk tolerance is when structuring your portfolio. Total risk assessment has several variables when undertaking an investment risk analysis of one's portfolio. There is the risk of the asset allocation that we are all aware or heard about but there is also your personal characteristics that are a very important factor as well. How much you can personally afford to lose will not be the same as say your son. Also how much risk you can emotionally tolerate will not be the same as the next individual.
About the Author: Scott G. Henderson has written many articles about the subject of financial portfolio management. After years of personal experience, education and research he spent over 18 months writing and developing the educational curriculum "Successful Online Portfolio Management"
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