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Original, source-based guides to portfolio and risk management for investors.
20 articles · Original research guides with primary sources and worked examples
The number of holdings alone cannot tell you how diversified a portfolio is. Learn to map overlap between stocks and ETFs, your largest positions, and shared revenue drivers.
Read article →Companies in different sectors can share exposure to the same customers and capital spending cycle. Calculate shared demand exposure and its contribution to portfolio losses.
Read article →Correlation measures how closely two assets' returns move together. Use a two-asset volatility calculation to understand diversification benefits and the limits of historical correlations.
Read article →Work backward from the loss you can bear and the risk per share to calculate how many shares to buy. Then apply cash limits, concentration limits, and gap-down risk.
Read article →Separate living expenses and earmarked funds before calling your entire investment balance money you can afford to lose. See how account loss limits differ from trade loss budgets.
Read article →Maximum drawdown measures the deepest decline from an earlier peak during a period. Learn to account for cash flows, observation frequency, and recovery time alongside overall returns.
Read article →Price fluctuations and irrecoverable impairment of investment value are different risks. Learn to assess infrequent trading, debt burdens, and dilution of per-share value.
Read article →Rebalancing restores target asset weights. Learn how review schedules differ from allocation bands, how to use new contributions, and when a change in investment thesis calls for a separate decision.
Read article →Cash serves different roles for living expenses, planned spending, and future investments. Calculate how cash allocations affect downside protection and participation in gains.
Read article →Intending to invest for the long term differs from being able to leave money invested. Check liquidity by matching spending dates with sale, settlement, and currency conversion timelines.
Read article →Foreign asset returns in won depend on both local prices and exchange rates. Separate foreign cash, debt, and hedges to calculate net exposure and combined returns.
Read article →Beta estimates sensitivity to a particular benchmark's returns. Learn how it differs from total volatility and company-specific risk, and why the estimation period and explanatory power matter.
Read article →A higher-return strategy is not necessarily better relative to risk. Learn Sharpe ratio calculation requirements, pitfalls with negative ratios, and how to assess drawdowns and benchmark performance.
Read article →Win rate alone can hide a pattern of small gains and large losses. Calculate the break-even win rate using realized average wins, average losses, and trading costs.
Read article →After a loss, returns apply to a smaller amount, so recovering principal requires a larger percentage gain. Explore compounding, the illusion created by new deposits, and the impact of withdrawals.
Read article →A concentrated investment record should include what would prove you wrong and the loss to total assets. Make the record specific enough to avoid mistaking familiarity for an information advantage.
Read article →A failed investment thesis differs from a short-term price decline. Set verifiable metrics and deadlines to distinguish temporary delays, insufficient information, and structural damage.
Read article →Weighting asset returns in bullish, base, and bearish scenarios reveals total profit or loss. Understand the limits of assumed probabilities and the risk of assets falling together in a crisis.
Read article →Debt does not shrink when asset prices fall, magnifying losses on equity. Hypothetical calculations explain collateral ratios, margin calls, and forced-sale risk.
Read article →Record the information available at the time alongside actual orders. Use journal reviews to reduce outcome bias and identify recurring errors in costs, execution, and position weights.
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