Episode 6 on the Wilson Wealth Management YouTube channel looks at nonsystematic risk.
In episode 5, we saw how standard deviation is used as an objective, statistical measure of investment risk. That is the quantitative side. Number crunching.
To assess the qualitative aspect of an asset’s risk, and to better build the standard deviation, investment risk is usually broken into two components. Nonsystematic and systematic risks.
In this episode, the focus is on the nonsystematic risk factors.
What is a nonsystematic risk? Also known as asset specific or diversifiable risk.
What are the key nonsystematic risks?
How should investors analyze these risks?
Why is it important to factor these risks into your business and investing decisions?
