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November 23, 2006
Podcast for 11/23/06: Risk-adjusted return
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You can't examine return percentage in a vacuum; you need to consider risk as well. Kim talks about the concept of risk-adjusted return and how to measure it.
MP3 Download: Hi (128k) | Lo (24k)
Length: 9:46
Notes:
1:33 We've been taught to obsess over portfolio performance, when we should instead focus on outcomes.
2:27 A couple of approaches to risk: ignore it or manage risk and performance as interrelated parts of the equation.
3:25 Average numbers on their own mean zilch.
4:09 Risk is the standard deviation of return. What that means and some examples.
5:46 Risk-adjusted return and how to measure it (Sharpe ratio)
7:36 Past performance doesn't tell us what will happen in the future.
Resources:
Risk-adjusted return
Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.
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Focus of This Blog
Kim Snider is an author, speaker and host of Financial Success Coaching, Saturdays at noon, on KRLD Newsradio 1080, Dallas - Fort Worth. This blog is primarily devoted to empowering individual investors with information to help them be good stewards of their money. Above all, it is about achieving true financial success. Kim's book, How To Be the Family CFO: Four Simple Steps to Put Your Financial House in Order is in bookstores now. Order yours from Amazon or other fine booksellers today.
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