Comments on: 3 lessons the individual investor can learn from JPMorgan Chase http://thomas.broxrost.com/2008/09/29/3-lessons-the-individual-investor-can-learn-from-jpmorgan-chase/#utm_source=feed&utm_medium=feed&utm_campaign=feed Thu, 15 Jul 2010 16:03:06 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Thomas Brox Røst http://thomas.broxrost.com/2008/09/29/3-lessons-the-individual-investor-can-learn-from-jpmorgan-chase/comment-page-1/#comment-6484 Thomas Brox Røst Mon, 29 Sep 2008 15:33:43 +0000 http://thomas.broxrost.com/?p=80#comment-6484 Hanstaruna, I think the main problem was that of severely misjudging the risk of subprime CDOs. You typically have a collection of assets with different risk profiles. Taken together, these add up to the level of risk you are comfortable with. If your supposedly low-risk assets turn out to be high-risk instead, you are left with a portfolio that carries a lot more risk than you originally intended. This is what caught many by surprise. Hanstaruna, I think the main problem was that of severely misjudging the risk of subprime CDOs.

You typically have a collection of assets with different risk profiles. Taken together, these add up to the level of risk you are comfortable with. If your supposedly low-risk assets turn out to be high-risk instead, you are left with a portfolio that carries a lot more risk than you originally intended. This is what caught many by surprise.

]]> By: Hanstaruna Invest Tools http://thomas.broxrost.com/2008/09/29/3-lessons-the-individual-investor-can-learn-from-jpmorgan-chase/comment-page-1/#comment-6483 Hanstaruna Invest Tools Mon, 29 Sep 2008 14:55:36 +0000 http://thomas.broxrost.com/?p=80#comment-6483 I don't understand why the other companies didn't do investment diversification, i am sure the CEOs understand the importance of diversification. I don’t understand why the other companies didn’t do investment diversification, i am sure the CEOs understand the importance of diversification.

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