How can I evaluate the stock risk?
The risk of the warehouse can be divided into systemic and specific or non -systematic risk. System risk is the risk of collapse of the whole economy and systematic risk is the risk of stock market collapse. A specific risk is the loss in one particular stock. Without this knowledge, it can try to assess the risks of a particular society and then may diversify certain risks. The reasonable starting point is to estimate future prospects of the main source of income. For example, after World War II, the aircraft industry, as well as the transport industry, bloomed. Growth in these industries provided so many competitions for railways that they became poor investments. Publicly owned corporations are required by the audited financial statements with regulatory bodies in all major Western countries and financial information. Unfortunately, this information can be misleading. It is possible for companies to use creative accounting or reporting strategies that incorrectly characterize the financialthe health and stability of society.
Reading the company's analytical reports can also help in risk assessment. Professional analysts consider their interviews with business management very valuable. They believe that they can use the information collected in these interviews to assess the future prospects of the company and subsequently the related risk of shares. However, there is a risk of relying on interviews with analytical interviews because sometimes the company management blocks the publication of negative information.
Perhaps the best approach to checking the risk of shares is through diversification. The idea of the diversification is that no one can successfully choose shares that would cause the overall market, and no one can always avoid an unexpected stock risk. By distributing shares in several companies among various stock market sectors, a decent yield can be obtained without worrying that one companyOst will be wrong. A different approach to checking the risk of shares is the purchase of the stock market as a whole, for example by purchasing funds traded on the Stock Exchange (ETF). It is possible to increase portfolio diversification beyond the stock market by investing in commodities and real estate. This avoids the risk of individual inventories and at the same time reduces the exposure to the portfolio to a systematic risk.