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Subject:  Re: Risk-Adjusted Returns: Relevant? Date:  2/23/2002  10:29 PM
Author:  jrr7 Number:  182 of 297

Okay. Now I think I'm beginning to understand what you're saying. From your POV (and which will be my POV pretty soon I hope), it's relevant.

However, since my current capital is so small, and since the amount I am putting in is large compared to the capital value, don't the rewards of taking on additional risk, and the "dollar cost averaging" bonus of regularly investing in a volatile asset, more than make up for the probability of an impairment?

Let 's put it this way. How can we calculate risk adjusted returns for impairment of capital when it's hard to manage the risks? Does the fundamentalist's benchmark "debt-to-equity ratio" figure into your calculations? How do you know when the mamangement isn't telling you the whole story? [Yes, I read the WSJ, but if you bail whenever they're nervous about a stock, you'll miss a lot of winners]

BTW. I like TIPS in an IRA. I calculate the main risk as the government deciding wrong where to set the inflation numbers.
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