Stock investment risk. Definition of equity investment
Stock Investment Risk
- The chance that the actual returns realized on an investment will differ from the expected return.
- the degree of uncertainty as to the realization of expected returns.
- On ground of assurance of the return, there are two kinds of Investments - Riskless and Risky. Riskless investments are guaranteed, but since the value of a guarantee is only as good as the guarantor, those backed by the full faith and confidence of a large stable government are the only ones
- banal: repeated too often; overfamiliar through overuse; "bromidic sermons"; "his remarks were trite and commonplace"; "hackneyed phrases"; "a stock answer"; "repeating threadbare jokes"; "parroting some timeworn axiom"; "the trite metaphor `hard as nails'"
- (of a phrase or expression) So regularly used as to be automatic or hackneyed
- the capital raised by a corporation through the issue of shares entitling holders to an ownership interest (equity); "he owns a controlling share of the company's stock"
- (of a product or type of product) Usually kept in stock and thus regularly available for sale
- Denoting a conventional character type or situation that recurs in a particular genre of literature, theater, or film
- have on hand; "Do you carry kerosene heaters?"
stock investment risk - The Nature
The Nature of Risk (Fraser Publishing Library) (Contrary Opinion Library)
Sometimes the biggest risk of all is taking one, and the need to be sure you are making the right choice actually increases the risk. The market is not efficient and hedging doesn't work. To rely on charts to understand the market is Mamis' way. The author is an excellent market technician who offers sound financial guidance and insights into the prepared mind. He gets your thinking going with a comfortable investment philosphy that will often go against convention. There are enough anecdotes, war stories, and charts to make for sound advise. The path to market freedom is technique, and you don't have to be one of the best traders to succeed with experience. It seems to me that the entire 1990s have confirmed the ambiguities of market language and how to operate in such a world. You will know how to keep risk at bay which most of us find not to be an easy task. 241 pages.
Penny Stocks Investment
Penny stocks are high risk investments. If any new investors come they should know about the risks that are involved in this. Here the attractive part of these stocks is to make a higher profit on lower cash amount.
stock investment risk
The Equity Risk Premium-the difference between the rate of return on common stock and the return on government securities-has been widely recognized as the key to forecasting future returns on the stock market. Though relatively simple in theory, understanding and making practical use of the equity risk premium concept has been dauntingly complex-until now.
In The Equity Risk Premium, financial advisor, author, and scholar Bradford Cornell makes accessible for the first time an authoritative explanation of the equity risk premium and how it works in the real world. Step-by-step, his lucid, nontechnical presentation leads the reader to a new and more enlightened basis for making asset allocation choices.
Cornell begins his analysis by looking at the equity risk premium in the light of stock market history. He examines the use of historical data in estimating future stock market performance, including the historical relationship between stock returns and risk premium, the impact of survival bias, and the effect of long-horizon stock and bond returns. Using the stock market boom of the 1990s as a case study, Cornell demonstrates what equity risk premium analysis can tell us about whether stock prices are high or low, whether the stock market itself may have changed, and whether indeed a new economic paradigm of higher earnings and dividend growth is now in place.
Cornell analyzes forward-looking estimates of the equity risk premium through the lens of various competing approaches and assesses the relative merits of each. Among those scrutinized are the Discounted Cash Flow model, the Kaplan-Rubeck study, the Welch survey, and the Fama-French Aggregate IRR analysis. His insights on risk aversion theory, on the types of risk that have been rewarded over time, and on changing investor demographics all supply the sophisticated investor with important pieces of the risk premium puzzle.
In his invaluable summing up of the equity risk premium and the long-run outlook for common stocks, Cornell weighs the evidence and assays the impact of a lower equity risk premium in the future-and its profound implications for investments, corporate decision making, and retirement planning.
The product of years of serious analysis and hard-won insights, The Equity Risk Premium is essential reading for institutional investors, money managers, corporate financial officers, and all others who require a higher level of market analysis.
"The Equity Risk Premium plays a critical role in legal and regulatory matters related to corporate finance. Along with the cost of debt, it is the most important determinant of a company's cost of capital. As such, it is an integral part of the decision-making process in corporate finance. For instance, whether or not a major acquisition makes sense can depend on the assumed value of the equity risk premium. In addition, the equity risk premium is an issue that regulatory bodies consider when they set fair rates of return for regulated companies. Cornell's book is an important contribution because it includes both an historical analysis of the equity risk premium and provides tools for forecasting reasonable levels of the risk premium in the years ahead."-Theodore N. Miller, Partner, Sidley & Austin.
"Estimating how well stocks will do in the future from how well they have done in the past is like driving a car while looking in the rearview mirror. Brad Cornell provides us with an important forward-looking view in this easily understood guide to the equity risk premium and confounds the popular view that stocks will do well in the future because they have done well in the past."-Michael Brennan, Past President of the American Finance Association and Professor of Finance at the University of California at Los Angeles.