What causes a stock to be risky?

Out of the asset classes of cash, bonds, property, and equities, the latter is considered the most risky investment. However investors can identify stocks to match their risk profile by evaluating the level of risk by looking at the debt, market cap, profitability, age and sector of that company. Large company debt Companies which have large debt numbers on their balance sheet are more risky than companies that have lower debt levels. To calculate the debt ratio you can use …

Read MoreWhat causes a stock to be risky?

Four ways to manage risk in your share portfolio

Mitigating risk is an important exercise for any investor in order to preserve capital. The main objective of any portfolio is maximum returns, however this can only be achieved if risk is managed correctly. In this article we outline four ways to reduce risk and therefore optimise performance. 1. Calculating beta One way to mitigate risk in the portfolio is the look at the beta of each stock. Beta measures how the stock fluctuates compared to the broader market. A …

Read MoreFour ways to manage risk in your share portfolio

What is volatility and why does it matter

Stock markets around the world have recently experienced some very turbulent activity. The Dow Jones reached an all-time high of 26,616.71 points on the 26th Jan 2018 to then fall 10.4 per cent on Feb 8 2018. These large movements in the index sparked regular discussions about volatility in the market. So what does volatility actually mean and why is it examined in so much depth by market commentators? What is volatility? Volatility is the speed of a price changes …

Read MoreWhat is volatility and why does it matter