The Sharpe Ratio is one of the risk adjusted returns method used in evaluating financial investments. Created by William Sharpe, the ratio tells us how much an investment instrument compensates us for the risk it takes. Put it simply, life is good without risk. You and I can safely invest in a government bond, a bank FD or a PPF and ignore all the volatility and market … [Read more...] about The problem with Sharpe Ratio and other measures
Risk is such a commonly used word in our daily lives. It is also the one, which is not fully understood. The term we more often use is "chance". Let's use this chance to understand risk. What is risk? Risk is the uncertainty that we face when we venture into the 'unknown'. If I could express it in the following dilemma: … [Read more...] about How much risk can you take?
The Franklin Ultra Short Bond fund is a debt mutual fund which invests in various short term corporate bonds, government securities and money market instruments. If you look at the holdings of this fund, you will observe that they all carry a credit rating. A credit rating gives an idea about how safe or not is the investment and whether the issuer is in a position to … [Read more...] about Debt Mutual Funds and Structured Obligations (SO) – Does it mean more risk?
What is volatility? As you understand when a thing is volatile, it does not have a linear movement. It tends to go up and down based on several influencing factors. Volatility and Investments Investments and their markets by their nature are volatile. You take any of them - oil, gold, copper, silver, stocks, etc., the prices of each tend to have ups and downs. With … [Read more...] about Volatility in investments – Is it good?