Wednesday, June 17, 2009

Investments and Risk Management


The last of my academic modules at Warwick Business School ended at an absolute high.

The Investments and Risk management was a great module. Prof. Ron Watson of Rutgers Business School took us through the finer nuances of valuations of bonds and shares and gave an interesting view about the world economy.

Prof Watson has an enviable experience in the Government (Sr. VP Federal Reserve bank of Philadelphia), Private Sector (CEO of the Custodial Trust Company – Bear Stearns), and is now an academician since the last 7 years.

The wealth of his knowledge helped us understand Risk Management and the variables through which risk can be assessed and mitigated. Diversification is the key to successful investing as no one can either predict the markets nor has anyone ever been able to avoid the troughs that keep recurring at an amazing regularity.

But there are two simple rules that have stood the test of time and can ensure that investments grow and outperform the government bonds over a period of time - Discipline and Diversification.

That’s the only way every investor can achieve one’s ultimate quest to generate positive ‘Alpha’….

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