Let’s start with a true story. Rambus Inc. has been suing companies in a law suit that has lasted 7 years. Rambus hoped to get $4 billion in damages. Yesterday morning, November 16, 2011, the stock was selling at $18 per share. During the day, the court ruled that Rambus had not been illegally damaged… Continue Reading
The Risk-Reward Tradeoff involves understanding the amount of risk that you are willing take in investing. The general rule is that an investor makes riskier investments in order to get higher rewards (i.e. earn more money). Low risk investments generally are expected to produce low level returns. High risk investments hopefully offer a high level… Continue Reading
Country Risk is the risk that a country will default of its debts. When a country fails to pay its debts, many of the businesses institutions in the country are damages as well as companies outside of the country. County risk affects bonds, stocks, futures, options, and mutual funds in the defaulting country. Foreign-Exchange Risk… Continue Reading
There are 2 basic risk categories: systematic risk and unsystematic risk. Systematic risk is usually a general event or phenomenon which can affect many of your portfolio’s investments. An important political happening can affect the whole market including several of your assets. The individual investor cannot do anything to protect himself against this kind of… Continue Reading
After determining how much risk you can take according to your time horizon and your available bank roll, you can employ the risk pyramid method of allocating your money between various investments. The risk pyramid works by dividing the pyramid into three horizontal levels. The bottom level of the pyramid is the foundation and the… Continue Reading
Each person has his own risk tolerance level and there is no magical risk tolerance formula that works for everyone. However, there are 2 important considerations to consider: one’s time horizon and one’s bankroll. Time Horizon Before investing, one should consider his time horizon, the amount of time that he can keep his money invested.… Continue Reading
The other day, an investor friend of mine was telling me about risk management. He said that many people lose lots of money because they don’t employ risk management. I understood him because I have lost my own money and at the time I didn’t really understand why! Therefore, in upcoming articles I would like… Continue Reading
During the 2008 World Summit and Exposition of the Dairy Industry the Zaragoza Agro-Industrial Group introduced two new product lines into the marketplace, called Levia and Muuu. The Exposition was held at the Centro Banamex in Mexico City. Both brands are the first yogurts in Mexico which include dietary fiber, antioxidants, and Omega-3. These nutrients… Continue Reading
Financial Select Sector SPDR (XLF) is an investment fund which copies the Financial Select Sector index. At least 95% of of XLF’s investments are in the same companies that the index i9nvests in. The index is industry specific and invests in insurance, capital markets, commercial banks, diversified financial services, real estate investment funds, thrifts and… Continue Reading
MF Global Holdings Ltd. has filed for bankruptcy due to its overextension of European debt which will not be repaid. MF Global was a giant investment company with over 2000 employees worldwide. Deutsche Bank and JPMorgan Chase are the company’s largest creditors. MF Global owes Deutsche Bank more than $one billion and owes JPMorgan over… Continue Reading