UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev | Next
Author: TMFCogitarius Big gold star, 5000 posts Old School Fool Home Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 46837  
Subject: Re: Higher risk, but not higher returns Date: 4/22/2012 6:52 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Paul: 'Clearly a layman defines risk as the chance that a stock price will drop, while reward is the chance that the stock price will increase.'

Judging by the large quantities of 'lay' Fools jumping into options and other not so 'lay' investing tactics, I doubt we can still hang on to that old world definition of equity risk. Which I also happen to disagree with. For me, equity risk is the probability of permanent loss of capital. The 2008 meltdown being a case in point.

'most folks are not interested in volatility in and of itself.'

Which is passing strange, since most folks I've come across aim at beating a market index, e.g. the S&P 500. How exactly do they plan to do so if they ignore Beta, which is nothing but the variance of the equity relative to the variance of the market.

If they really wanted to ignore Beta, then their only choice is to invest in the market index itself!
-------------------------------
Global Gains Home Fool
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Apple

The Saddest Place on iPhone Day
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement