O'Reilly logo

Fire Your Stock Analyst!: Analyzing Stocks on Your Own by Harry Domash

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 2. Evaluating Risk

Risk is the probability of losing money. All stocks are risky compared to government-insured savings accounts; but some stocks are a lot riskier than others. Yet investors rarely evaluate the inherent risks when contemplating buying a stock. But it makes sense to do so. For instance, suppose that you were considering two stocks, and your analysis showed that both had the possibility of doubling in price over the next two years, but Company A’s stock was twice as risky as Company B’s. Knowing that, the choice between Company A and Company B becomes obvious.

Portfolio Risk

You can reduce your overall risk by diversifying your investments over a variety of stocks in diverse industries.

The airline and oil industries provide ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required