Risk Articles
Rethinking Safe Investments in 2026
June 2026 by Jenna Brashear
Hear a variety of ideas for boosting safe money returns from members in the AAII Community.
June 2026 by Jenna Brashear
Hear a variety of ideas for boosting safe money returns from members in the AAII Community.
Choosing an Equity Portfolio You Can Live With—for Life
May 2026 by Paul Merriman
The path matters as much as the returns themselves. The goal is to find a path smooth enough that you will stay on it.
May 2026 by Paul Merriman
The path matters as much as the returns themselves. The goal is to find a path smooth enough that you will stay on it.
Aligning Portfolios With the Risk Index
July 2025 by Cynthia McLaughlin
Put risk into perspective by measuring volatility relative to a market benchmark.
July 2025 by Cynthia McLaughlin
Put risk into perspective by measuring volatility relative to a market benchmark.
What Market Volatility Really Is and How to Navigate It
June 2025 by Charles Rotblut
Volatility refers to the magnitude of movement instead of a single direction; AAII founder James Cloonan encouraged investors to focus on “real risk.”
June 2025 by Charles Rotblut
Volatility refers to the magnitude of movement instead of a single direction; AAII founder James Cloonan encouraged investors to focus on “real risk.”
Understanding the VIX: A Practical Guide
April 2025 by Wayne A. Thorp
The VIX is a widely watched metric that tracks expected volatility in the stock market. How you can use it to gauge potential market turning points.
April 2025 by Wayne A. Thorp
The VIX is a widely watched metric that tracks expected volatility in the stock market. How you can use it to gauge potential market turning points.
Six Lessons of Investment Loss to Keep You Winning
September 2024 by Andrew Stotz
Stories of investing loss that underscore the importance of preparation, vigilance and learning from others’ experiences.
September 2024 by Andrew Stotz
Stories of investing loss that underscore the importance of preparation, vigilance and learning from others’ experiences.
Common Measures of Volatility for Making Useful Comparisons
May 2024 by John Bajkowski, Jean Henrich
Volatility is the most common proxy for measuring investment risk and should consider the portfolio impact of diversification.
May 2024 by John Bajkowski, Jean Henrich
Volatility is the most common proxy for measuring investment risk and should consider the portfolio impact of diversification.
The Relationship Between Stock Market Volatility and Returns
October 2023 by Craig Israelsen
Less volatility isn’t always a good thing, especially when considering the returns that follow periods of high volatility.
October 2023 by Craig Israelsen
Less volatility isn’t always a good thing, especially when considering the returns that follow periods of high volatility.
Design Your Portfolio With the Worst 2% of Times in Mind
August 2023 by William Bernstein
A “suboptimal portfolio” that you can tolerate is better than an “optimal” one that you can’t stick with.
August 2023 by William Bernstein
A “suboptimal portfolio” that you can tolerate is better than an “optimal” one that you can’t stick with.
Learning to Manage the Myriad Risks in Your Portfolio
January 2023 by John Deysher
If recent events have raised your stress levels, now is the time to review your portfolio for any of the potential risks.
January 2023 by John Deysher
If recent events have raised your stress levels, now is the time to review your portfolio for any of the potential risks.
Why You Should Consider Volatility When Building a Portfolio
October 2022 by Craig Israelsen
One observation from looking at six model portfolios is that focusing on the volatility of your portfolio gives you a more reliable measure of how it is actually behaving.
October 2022 by Craig Israelsen
One observation from looking at six model portfolios is that focusing on the volatility of your portfolio gives you a more reliable measure of how it is actually behaving.
Using Your Portfolio's Asset Mix to Control Your Risk
August 2022 by Wayne A. Thorp
Once you know your risk capacity, you can make adjustments to your portfolio to arrive at the optimal allocation for you.
August 2022 by Wayne A. Thorp
Once you know your risk capacity, you can make adjustments to your portfolio to arrive at the optimal allocation for you.
Measuring Market Volatility Trends With the VIX
June 2022 by Brian Haughey
The power of the S&P 500 Volatility Index lies more in its relative, or comparative, level than in its absolute level.
June 2022 by Brian Haughey
The power of the S&P 500 Volatility Index lies more in its relative, or comparative, level than in its absolute level.
The Pains and Gains of Investing
April 2022 by Paul Merriman
A look at hypothetical performance for five simple equity portfolios can help you choose which risk measures matter the most to you.
April 2022 by Paul Merriman
A look at hypothetical performance for five simple equity portfolios can help you choose which risk measures matter the most to you.
Online Exclusive: Understanding Risk-Adjusted Returns via the Sharpe Ratio
February 2022 by Matthew Bajkowski
When comparing the performance of two securities, funds or portfolios, investors must consider risk-adjusted returns to see if they are being adequately compensated for the risk they are assuming.
February 2022 by Matthew Bajkowski
When comparing the performance of two securities, funds or portfolios, investors must consider risk-adjusted returns to see if they are being adequately compensated for the risk they are assuming.
How Much Risk Can You Handle and Still Meet Your Goals?
March 2021 by Charles Rotblut
An investor’s overall tolerance can be determined both by the timing of their goals and financial and psychological factors.
March 2021 by Charles Rotblut
An investor’s overall tolerance can be determined both by the timing of their goals and financial and psychological factors.
Millionaires' Attitude Toward Risk Differs From Popular Theories
December 2020 by Anine Sus
Many wealthy investors do not believe that higher risk translates to higher returns. A study of over 2,000 people in the U.S. with at least $1 million of investable assets looked at how popular academic theories apply to the way they invest.
December 2020 by Anine Sus
Many wealthy investors do not believe that higher risk translates to higher returns. A study of over 2,000 people in the U.S. with at least $1 million of investable assets looked at how popular academic theories apply to the way they invest.
Sequence Risk: Is It Really a Big Deal?
December 2020 by AAII Staff
Sequence risk refers to the chance of running out of money in retirement due to a period of bad returns. While it can occur, Javier Estrada of Spain’s IESE Business School argues that sequence risk is commonly over-exaggerated, leading retirees to pursue overly conservative asset allocation strategies or reduce their standard of living.
December 2020 by AAII Staff
Sequence risk refers to the chance of running out of money in retirement due to a period of bad returns. While it can occur, Javier Estrada of Spain’s IESE Business School argues that sequence risk is commonly over-exaggerated, leading retirees to pursue overly conservative asset allocation strategies or reduce their standard of living.
Retirees Don't Accurately Perceive Their Risks
October 2020 by Anine Sus
Retirees’ expectations of their future risks differ from the more probable risks they will encounter.
October 2020 by Anine Sus
Retirees’ expectations of their future risks differ from the more probable risks they will encounter.
Broker Notifications Push Investors to Higher Risk
September 2020 by Matthew Bajkowski
investors who receive alerts from brokers on their investments are induced to take higher risk, according to a study by the Center for Tax and Accounting Research.
September 2020 by Matthew Bajkowski
investors who receive alerts from brokers on their investments are induced to take higher risk, according to a study by the Center for Tax and Accounting Research.
Determining the Appropriate Level of Risk for You
August 2020 by Charles Rotblut
To help you identify your tolerance for risk, we’ve developed this worksheet as part of The AAII Way, a process for creating a comprehensive plan that can be your investing guide.
August 2020 by Charles Rotblut
To help you identify your tolerance for risk, we’ve developed this worksheet as part of The AAII Way, a process for creating a comprehensive plan that can be your investing guide.
Lower-Risk, Higher-Yielding Equity Funds
August 2020 by Charles Rotblut
Mutual fund investors seeking higher income but wanting to avoid a higher chance of losing principal can strike a balance by looking at two fund characteristics: the category risk index and the yield.
August 2020 by Charles Rotblut
Mutual fund investors seeking higher income but wanting to avoid a higher chance of losing principal can strike a balance by looking at two fund characteristics: the category risk index and the yield.
Trailing Stop-Losses Effective at Curtailing Downside Risk
May 2019 by AAII Staff
May 2019 by AAII Staff
A recent study found that trailing stop-loss orders result in higher risk-adjusted returns and also perform particularly well at reducing downside risk.
Downside Volatility Determines Trend-Following Profits
May 2017 by AAII Staff
The success of trend-following strategies is more dependent on the volatility of the underlying asset following a buy or sell signal than the rules used for determining when signals are issued.
May 2017 by AAII Staff
The success of trend-following strategies is more dependent on the volatility of the underlying asset following a buy or sell signal than the rules used for determining when signals are issued.
The Sequence in Which Returns Occur Affects Your Wealth
May 2015 by Charles Rotblut
The timing of positive and negative returns significantly impacts wealth, particularly if withdrawals are taken or other changes are made.
May 2015 by Charles Rotblut
The timing of positive and negative returns significantly impacts wealth, particularly if withdrawals are taken or other changes are made.
The Danger of Getting Out of Stocks During Bear Markets
May 2014 by Charles Rotblut
Panicking and pulling out of stocks during turbulent market conditions can have a significant and lasting negative impact on your wealth.
May 2014 by Charles Rotblut
Panicking and pulling out of stocks during turbulent market conditions can have a significant and lasting negative impact on your wealth.