Investors face all kinds of risks in the financial markets. There is credit risk – the risk that a borrower will default on an obligation. Liquidity risk – the possibility that you will not be able to convert a security into cash when you need the money. Market risk – the likelihood that the share […]
Many people tell me they want to build a risk free portfolio. I tell them I hope you understand what is risk. They say yes. Here, these are the words that they need to know: Currency risk, inflation risk, systematic risk, principal risk, country risk, economic risk, mortgage risk, liquidity risk, volatility as risk, risk […]
The easiest way to define ‘liquidity risk’ is risk that arises from the difficulty of selling an asset. An investment may sometimes need to be sold quickly. The reasons can be different for individuals and different for an investment manager. Unfortunately, an insufficient secondary market may prevent the liquidation or limit the funds that can […]
In a country like USA where there is a decent press, democracy and a vigilant SEC, the financial fraud culprits are brought to book quite slowly, if at all. What will happen to Indian customers who have been had? How does one react to the CEO of a foreign bank saying “we will make up […]
Investors face all kinds of risks in the financial markets.There is credit risk – the risk that a borrower will default on an obligation. Liquidity risk – the possibility that you will not be able to convert a security into cash when you need the money. Market risk – the likelihood that the share market […]