Learning Path.
Understanding Risk
Deep dive into risk concepts: volatility, tolerance, capacity, and behavioural patterns that affect investment decisions.
Articles
5
For
Investors who want to better understand their relationship with risk
Risk vs Volatility vs Uncertainty: What the Words Actually Mean
These three words are often used interchangeably, but they describe different things. Confusing them leads to poor decisions. Understanding them leads to calmer ones. This article explains the distinctions: volatility as normal movement, risk as the...
Risk Tolerance vs Risk Capacity: Two Questions That Are Often Confused
When people talk about how much risk they can handle, they usually mean one thing. But there are actually two distinct questions, and confusing them leads to predictable problems. The first question is psychological: how much volatility can you watch...
Loss Aversion and Panic Selling: Why Losses Hurt More and What to Do About It
A $10,000 loss and a $10,000 gain are mathematically equivalent. They are not psychologically equivalent. The loss feels worse. Much worse. This asymmetry is called loss aversion, and it is one of the most robust findings in behavioural economics. It...
Why Markets Fall: Cycles, Sentiment, and the Limits of Headlines
Markets fall. This is not a warning or a prediction. It is a description of how markets have always worked. Understanding why markets decline does not help you avoid them. No one can reliably predict when falls will happen or how deep they will go. B...
Diversification: What It Is and What It Is Not
What diversification actually does, what it cannot do, and why the instinct to concentrate is persistent despite evidence against it. Diversification removes the possibility of ruin from a single mistake.
Illuminvest provides general educational information only and does not provide personal financial advice.