i seem not to get the intuition right on when to say the assets base is small (so low ability to take risk or adequate/significant (so above average ability to take risk). Any ideas? any quantitative way around this?
greater than 10% return means asset base is small??
i really don’t know…have been trying to figure some thing out but its just not working
Not sure I get your question. Can you elaborate, or state it another way? The ability to take risk is relative to both goals and assets, but I would say any goals that would require extra risk to meet them is a willingness of client call. But I’d agree with the above, that 10-12% is a good middle ground. Recall the LTCM anecdote, that --academic finance teaches that to receive outsized returns, risk must be increased…LTCM proved that nicely
This is also my trouble area. Hope these 2 threads help. http://www.analystforum.com/phorums/read.php?13,1132153,1132153#msg-1132153 http://www.analystforum.com/phorums/read.php?13,1135483,1135663#msg-1135663 It seems there is not a straightforward quantitative way.
There are so many terms w/o clear and/or tangible definitions in IPS !