Here at Investopedia, we emphasize the importance of prudent investing—put at stake only what you can afford to lose and ensure your choices align with your financial goals and risk tolerance. This ...

The Treynor ratio and the Sharpe ratio are financial metrics that use different approaches to evaluate the risk-adjusted returns of an investment portfolio. The Treynor ratio employs beta and measures ...

Lu Yu is a managing director and lead portfolio manager with Virtus Systematic, a division of Virtus Advisers LLC. She has portfolio management and research responsibilities for the Systematic Team.

Idiosyncratic risk is unique to specific investments like companies or industries. Systematic risk impacts all investments and is driven by macroeconomic factors. Mitigate idiosyncratic risk by ...

While Modern Portfolio Theory (MPT) is popular in academic economics and finance, it fails to properly explain profits, ...

Learn what active risk is and how to calculate it. Understand the methods to evaluate active risk in portfolios and explore examples of funds outperforming benchmarks.

Understanding SIP, SWP, and STP: Smart Ways to Build, Manage, and Withdraw Mutual Fund Investments Mutual funds offer investors multiple ways to invest, withdraw, and balance their portfolios. Among ...

Investing in the stock market can be a way to build wealth in long term, but it requires careful thought and planning. Two popular strategies for active investors are Systematic Investment Plans (SIPs ...