Everyone has a different idea of what constitutes acceptable or unacceptable risk. Conservative investors are usually averse to any sort of risk, while aggressive investors tend to be a lot more comfortable with the idea of losing money if it means they get access to potentially higher returns.
How you calculate your portfolio risk will very much depend on your own financial goals, and how much time you can afford to dedicate to portfolio management. If your goals are relatively straightforward — for instance, long-term saving for retirement — then there is no reason why you can’t manage your portfolio risk yourself. However, more complex financial arrangements (for instance, day trading or multi-currency plays) may require…
