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risk


Aswath Damodaran on How to Invest Internationally
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Aswath Damodaran believes investors make two common valuation errors when it comes to country risk exposure: They focus on countries instead of companies and obsess over past mistakes.

Agriculture-Related Water Risks: Understanding the Threat
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Although investors are increasingly aware of water risks in their portfolios linked to agriculture, there is still work to be done to improve risk analysis and mitigation strategies. Several investors have begun by simply asking companies for better disclosure of agriculture supply chain risks.

Where’s the Beef?! Is Your Low-Fee Smart Beta Product Ripping You Off?
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So what do hamburgers and price per pound have to do with equity-oriented long-only smart beta products? A lot more than you think.

How to Best Gauge Your Risk Tolerance
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How often do you check your investment performance? The answer goes a long way in determining your risk tolerance.

The Benefits and Risks of Target Date Funds (TDFs)
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What is the optimal amount of risk a client should have in their portfolio throughout their career? This is not an easy question to answer, so it is not surprising that there are many different responses. Target date funds (TDFs) are, in theory, simple products that allow clients to focus on a single question: “How old am I?”

Integrating Water Risk Analysis into Portfolio Management
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Water risks can lead to unlimited financial impact and loss. Have you embedded water risk analysis into your portfolio management process? There are a number of increasingly sophisticated approaches that investors can take.

Top Five Articles from November: (Un)Passive Management, the TPP, and Inflation
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Leading posts from November include the latest installment in the Dumb Alpha series by Joachim Klement, CFA; a Trans-Pacific Partnership (TPP) reading list compiled by Larry Cao, CFA; and an analysis by Jason Voss, CFA, of the potential for a flash crash caused by the confluence of quantitative easing (QE), currency market structure, and other factors.

Three Reasons Why It Is Still a Good Time to Talk about Inflation
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Is it time to put conversations about inflation risk on the back burner? Questions like this illustrate a major flaw in the way many investors approach protecting their portfolios against inflation risk: Discussion starts only after rising inflation is already a problem and inflation hedges are expensive.

Estimating Variations in the Equity Risk Premium: A New Approach
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For years, researchers have used historical returns as proxies for estimating equity risk premium. This approach is problematic, however, because the resulting estimates don't vary from one year to the next, even though equity market returns can be wildly divergent from year to year. Katsunari Yamaguchi, CFA, has developed a new method for estimating equity premiums.

Building a Better Risk Model
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When Ignacio Ruiz and his associates, Piero Del Boca and Ricardo Pachón, looked at the current models for directional-way risk, they found that the models were impossible to calibrate. So, they set about creating their own model.