| Systematic Risk | |
 The risk inherent to the entire market or entire market segment. Also known as "un-diversifiable risk" or "market risk." |
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 Interest rates, recession and wars all represent sources of systematic risk because they will affect the entire market and cannot be avoided through diversification. Whereas this type of risk affects a broad range of securities, unsystematic risk affects a very specific group of securities or an individual security. Systematic risk can be mitigated only by being hedged. Even a portfolio of well diversified assets cannot escape all risk. |
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 The Dangers of Over-Diversification - We help to make clear the fine line between diversifying and overstretching your portfolio. The Importance Of Diversification - Without this risk-reduction technique, your chance of losses is dangerously and unnecessarily high. Determining Risk And The Risk Pyramid - Many investors do not understand how to determine the level of risk their individual portfolios should bear. Introduction to Value at Risk (VAR) - Part 1 - Volatility is not the only way to measure risk. Learn about the "new science of risk management". Introduction to Value at Risk (VAR) - Part 2 - Volatility is not the only way to measure risk. Learn about the "new science of risk management". |
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