Investing Risk Management & Understanding

Рет қаралды 15,100

Күн бұрын

If you want to sleep well at night while still reaching your investment goals it pays to both understand and know how to control the risks that you take. That is the goal of this video, to run through the main risks and touch on the methods that you can use to control those risks, if possible.
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Recommended PensionCraft KZfaq Playlists
- There are many different types of investment strategies. In this playlist we look at a number of these so that you decide what is right for you. • Investment Strategies
- Bewildered by investment? Start with this playlist • Investing for Beginners
- Building blocks for your portfolio • Portfolio Building Blocks
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Пікірлер: 50

@marlonstuart3459 4 жыл бұрын

Your content is some of the best I’ve come across, keep it up.

@Pensioncraft 4 жыл бұрын

Hi Marlon if people support us via Patreon I will! patreon.com/pensioncraft just in case... Thanks, Ramin.

@tudorioan5104 4 жыл бұрын

Never found on the internet such a honest, valuable info for beginners for free! :-) Thanks, mister! :-)

@Pensioncraft 4 жыл бұрын

Hi Tudor loan thank you that's very kind of you. I'm glad you find the videos helpful. Thanks, Ramin.

@learnsomethingneweveryday1539 4 жыл бұрын

couldn't agree more. I subscribed to learn more and help the guy earn money from providing free education

@tudorioan5104 4 жыл бұрын

@@learnsomethingneweveryday1539 He deserves the money for what he does, and you don't need to be envious and ironic!

@user-gl2wb3hb6l 7 ай бұрын

Scooby Doo will never be the same! Thanks for another great video Ramin. Ive just joined the Patreon and look forward to chatting in the future.

@Pensioncraft 7 ай бұрын

Welcome aboard! @user-gl2wb3hb6l

@evilzzzability 4 жыл бұрын

Great video. A good investor will always view return through the lense of risk taken. Velma is very underappreciated in my experience.

@AK-ky3ou 4 жыл бұрын

Great explanation and just vids all around

@alan29109 4 жыл бұрын

Great content. Thank you

@Pensioncraft 4 жыл бұрын

Hi Alan, thanks for the feedback! Ramin.

@barnstar2077 4 жыл бұрын

The main thing I took away from this video is that I need to invest in bread production!

@Pensioncraft 4 жыл бұрын

Interesting Barn Star. My grandmother used to tell me that it's the staff of life. Thanks, Ramin.

@grumpyae86 4 жыл бұрын

Fantastic insights on risk exposure and portfolio diversification options.

@Pensioncraft 4 жыл бұрын

Thanks Trung. Ramin

@learnsomethingneweveryday1539 4 жыл бұрын

Averages can give a false illusion to reality at times. People tend to forget also that if something drops 50% in value, you need 100% gain just to recover. That 19% drop in the video requires 24% growth to recover

@Pensioncraft 4 жыл бұрын

Hi Ahmet that's a great point, and one of the reasons why leveraged ETFs underperform during periods of market volatility kzfaq.info/get/bejne/jNmdrKmEv9G5f6M.html Thanks, Ramin.

@erikjanse3994 4 жыл бұрын

Thanks for the VDO. Question that came to my mind: When determining one's optimal portfolio balancing risk (volatility) and returns, why do you not make use of the Sharp-ratio? If using the Markowitz theory and taking into account the level of correlation between several assets, you can select an optimal portfolio based on maximising one's return against a certain level of risk (volatility), i.e. a Pareto set of combinations.

@Minecrafter_X1 3 жыл бұрын

Excellent videos as usual! Could you please publish a video to demonstrate how to plot those risk/return charts for a given ETF ?

@williamhenry9956 2 жыл бұрын

Fantastic information and very well executed. I'm looking forward to incorporating this into my trading strategy. You've gained a subscriber.

@Pensioncraft 2 жыл бұрын

Glad it was helpful!

@InvestingEducation 4 жыл бұрын

Good share

@Pensioncraft 4 жыл бұрын

Hi Investing Education thanks, Ramin.

@gerry2345 4 жыл бұрын

I like this vid.. Good insight..

@Pensioncraft 4 жыл бұрын

Thanks GerrysPlace! Ramin

@sgnambiar 4 жыл бұрын

Would you be able to do a video on investment options for a monthly income please. ?

@annettebroomfield1767 4 жыл бұрын

Hi, great video. Could you do a video on understanding the investment statement. May use a vanguard account to demonstrate as you have mentionned them in the past. Thanks

@Pensioncraft 4 жыл бұрын

Hi Annette do you mean how to interpret the return statement?

@peterpetram 4 жыл бұрын

Your content is awesome. It has productive and it helps me getting a glipse of what my portifolio might look like. I'm trying reaching you via email.

@Pensioncraft 4 жыл бұрын

Hi Peter, that's great! Thanks, Ramin.

@robertthomas3461 4 жыл бұрын

This might seem slightly off point, but it's relevant. I don't see how we can avoid another financial crisis sooner or later. Debt to GDP ratios are too high. Countries, such as the UK, have too much unfunded liabilities such as £5tn of unfunded pension liabilities. The BoE says another crisis will happen sooner or later. David Blanchflower says that the lessons of the last crisis have not been learnt...

@Pensioncraft 4 жыл бұрын

Hi Robert that's not off point at all. At some point we will get another crisis and for the UK a likely source is failing to get trade agreements in place if we get a no deal Brexit, as many others have said many times. This is the voluntary supply shock that Mark Carney has talked about. Thanks, Ramin.

@Xirtap17 4 жыл бұрын

Does volatility always correlate with "risk"? does it depend on the definition of "risk"? I had this investment and the PE was 5.0, it had zero debt, double digit consistent growth for the last ten years for revenue, book value + dividends, operating cash and earnings. The strength of its competitive advantages looked intact. The problem was the volatility! It was a high volatility stock. Lots of people traded it. On the other hand, there was a similar company in the same industry that had loads of debt, half as much growth, erratic growth, a PE of 35 and few identifiable competitive advantages. But it was also half as volatile historically. Which company is less "risky"? According to the price risk chart, the less risky one is the second one. Is this true? I would be glad to be set straight.

@Pensioncraft 4 жыл бұрын

Hi Patrick volatility is just one of the many types of risk, which is why I covered six types in the video. Balance sheet risk is what you're describing there I think. I'm guessing the company with more debt, erratic growth and fewer competitive advantages would have a higher credit risk which would be reflected in its borrowing costs and credit spread. Thanks, Ramin.

@Xirtap17 4 жыл бұрын

Thanks. I get it. I think it that, in general, it is super confusing when the finance world equates risk to historical volatility without specifying that it is “volatility risk”. I have to wonder which is stronger, volatility risk or balance sheet risk. i.e. what should I do when the two are in conflict like I have illustrated in my example?

@Xirtap17 4 жыл бұрын

@@Pensioncraft Thanks! I get it. I think that, in general, it is super confusing when the finance world equates the generic term "risk" to whatever specific type of risk they are talking about. I have to wonder, though, which type of risk is stronger: is volatility risk stronger than balance sheet risk? What should I do when the two are in conflict like I have illustrated in my example because simple diversification (multiple uncorrelated bets) only takes care of one type of "risk" called volatility risk. How can I handle balance sheet risk at the same time because it seems that to "broadly diversify" limits my ability to address balance sheet risk. Thanks again!

@Pensioncraft 4 жыл бұрын

Hi @@Xirtap17 in your example I'd go for higher volatility and lower balance sheet risk, but it would depend on the actual numbers e.g. if the vol is crazy or the company's teetering on the edge of default then the choice is pretty clear. If you google "capital structure arbitrage" there's a nice relationship between the volatility of a stock and its credit spread. If they get out of line you can trade one against the other i.e. if the vol is very low and the credit spread is very high institutional investors (hedge funds for example) could sell credit protection (via CDS) and buy volatility via equity options and vice versa if the vol is high relative to the credit spread. The Merton model ties equity value, volatility and credit spread together nicely. Thanks, Ramin.

@Xirtap17 4 жыл бұрын

@@Pensioncraft Thank-you. And thank-you for the responses. I highly value your putting yourself and knowledge out there.