Everybody with half a brain knows that when modern portfolio uses volatility (or variance) as a measure of risk, this isn’t really risk. A stock might have significant volatility, yet if it is going up all the time, investors won’t care too much about that volatility. And on the other hand, if share prices go down, the volatility can be low, and investors will still be concerned.
Upside risk is not risk, except…
Upside risk is not risk, except…
Upside risk is not risk, except…
Everybody with half a brain knows that when modern portfolio uses volatility (or variance) as a measure of risk, this isn’t really risk. A stock might have significant volatility, yet if it is going up all the time, investors won’t care too much about that volatility. And on the other hand, if share prices go down, the volatility can be low, and investors will still be concerned.