The cognitive bias of relying too heavily on the first piece of information encountered.
The tendency to search for and favor information that confirms existing beliefs.
A statistical measure of how two securities move in relation to each other, ranging from -1 to +1.
The practice of spreading investments across various assets to reduce exposure to any single risk.
The tendency to prefer avoiding losses over acquiring equivalent gains - losses hurt about twice as much as gains feel good.
The process of determining how much capital to allocate to each investment in a portfolio.
The process of realigning portfolio weights to maintain desired risk levels.
The tendency to overweight recent events when making decisions about the future.
A calculation of profit or potential profit that takes into account the degree of risk required to achieve it.
A measure of risk-adjusted return that compares an investments excess return to its standard deviation. Higher is better.
A statistical measure of the dispersion of returns, used to quantify investment volatility.
The degree of variation in an investments price over time, typically measured by standard deviation.