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Tip of the Day

Tip of the Day Stocks are High Risk, High Reward

Stocks are High Risk, High Reward - Stocks when used properly and taken out on a long-term basis usually return more than more investments in dividends, although are really risky...

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Systematic Risk

Systematic risk - A systematic risk is also called a market risk or an un-diversifiable risk. This risk applies to a whole class of assets or liabilities and entire portfolios because of the global effect it has on the entire market. Even if they include diversified risks (the mixture of different kinds of securities) they may not be protected. However if the market decline is not global and some areas are still open then having diversified risks can cushion the blow. The practice of hedging (reducing the impact of negative events) can mitigate the negative affects upon a systematic risk portfolio. Hedge funds can be set up to protect against large losses. However, hedge funds are not available to every investor and therefore these investors may rely on short selling and other means of trying to protect their interests.

Discuss It!

airplane said:

Mostly, not only local markets are affected by systematic risks as they occur globally due to some very sensitive issue. And these kind of issues should be resolved immediately.

bestessays.com customer reviews said:

According to market running this systematic risk is calculated if the market is affected globally than the risk is going be more it depends upon how the market is traded globally. Investor must have good idea about the risk he is taking when investing into market and see that what type risk he is going to face when markets go down and how much he is going to lose his investment.

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Daily Definition

Definition of the Day Back-End Load

Back-end load - A back-end load is a fee such as a sales charge or a commission, which investors pay when selling their mutual funds within a certain number of years, which is usually 5 or 10 years. The fee will be a percentage of the value that is being...

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