
Simple Ways to Measure Our Risk plus Benchmarking
arjaq Publicado 10 Abr in #Trader Contest #Indicators #Risk #Benchmark #Investment Theory37/65
Posiciones
Goal
The main goal of our investments will always to be at a higher profitability than the best possible risk-free option of investing. As we risk with our investments and have to involve our knowledge and time it is logical that we expect a better return than we get just for giving money to a financial institution. To assess our investment we could use various benchmarks, for example:
The main goal of our investments will always to be at a higher profitability than the best possible risk-free option of investing. As we risk with our investments and have to involve our knowledge and time it is logical that we expect a better return than we get just for giving money to a financial institution. To assess our investment we could use various benchmarks, for example:
- Best free of risk possibility - this is the final benchmark for any investment, we cannot go lower than that.
- The average return on associated index (if we invest in shares).
- The average return on stocks from the same market sector (for shares).
- Average interest on government bonds across the world (for bonds, but could also be considered as a more ambitious alternative for free of risk investment bench). For forex, we can benchmark against best interest on governmental bonds available to reflect risk.
- Average profit on assets with similar risk.
- Fund/hedge fund based on the same assets. Best fund's result for the similar assets.