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Portfolio Risk Assessment

Your investment portfolio is like a package with a fragile tag. It comes with instructions like Handle with care. It is because there are various risks associated with it. And where there are risks, there is risk assessment.

What is Risk Assessment?
What is Risk Assessment?

The process of analyzing and calculating the risks in your portfolio is known as Risk Assessment. It is crucial to assess the risks and manage them to yield the maximum returns or profits. How will we get out if we don’t know how deep we are in the water? To take our bodies out of the water, we need to be aware of their depth, and we will push ourselves accordingly. Similarly, to manage a particular risk, we first need to assess that risk. We need to understand the degree of that risk. 

It is crucial to assess the risks and manage them to yield the maximum returns or profits. We have all seen and read guides that promise to help you understand portfolio risk assessment intensively. But let us tell you clearly that nothing can teach you better than getting your hands dirty. 

First, we would have a look at the types of portfolio-level risks. Then, we would move on to how we can assess those risks. After that, we would have a thorough look at portfolio risk tolerance. So, let us start by dipping one at a time. And the first would be the portfolio-level risks. 

Portfolio-level risks
Portfolio-level risks~
  • Risk of losing money- 

To put it bluntly, the highest risk associated with anything financial is losing the finances. When you put money in your investment portfolio, there always lies a risk of losing that money. It might be a part of it or two assets out of five, but there is always that risk! 

  • Risk of lesser profits-

Now, even if everything is going well, what is the probability that your profits are always the highest? So, when you put money in a portfolio, there is always a risk that you are not making the most out of it, or that two out of five asset classes are not at their best. So, there is always this risk of lesser profits. 

  • Risk of mismanagement-

With so much on your plate, or even with enough on, there is always a risk of mismanagement. This mismanagement is either by you or by your fund manager. But along with the mismanagement comes the consequences of it. So the risks become multiple folds.

  • Risk of lack of expertise-

You do not go around treating people if you do not hold a degree in medicine. But even if you are not a stock broker or a fund manager, you make investments. Right? If an expert makes your investments, you will have leverage naturally because that is their job. Again, the consequences are something we might not see on the surface, but that doesn’t mean they aren’t there. 

  • Risk of short-sightedness-

When it comes to investments, finances, stocks, and calculations, your long-sightedness or vision plays a role. That comes with practice. How far you can see implies how better your portfolio will be. Thus, there is a risk of being short-sighted. 

  • Risk of uncertainty-

Let’s assume you are an expert, have a vision, and are good at managing, but there always remains some uncertainty. With practice & experience, people or machines can get experts at it. But generally, there will always be some uncertainty. So, that risk always remains. 

Now, we have looked at the risks associated with a portfolio. With all the types of risk in mind, we can look at portfolio risk tolerance.  

If you need some ideas about what to read next, here they are:
Portfolio Risk Tolerance
Portfolio Risk Tolerance ~

We all know that all investment options have different degrees of risk associated with them. Investors classify into three categories- aggressive, moderate, and conservative. The basis of classification here is how much risk tolerance they have. If you know the level of someone’s risk tolerance, helps investors in planning their entire portfolio. The following are the categories:

  • Aggressive investors- Those with higher risk-taking ability are ready to risk their money for higher profits. They do not mind facing uncertainty today for better benefits in the longer run. These are known as aggressive investors. Generally, young people are aggressive investors. 
  • Moderate investors– Moderate, as the name suggests, are the kind who operate in moderation and act in a balanced manner. They keep a balance between risk, uncertainty, and returns. Generally, people in their early forties or late thirties become moderate investors. 
  • Conservative investors- These are okay with lesser returns but are not okay with risking money. Even if it comes with a hint of assurance that it might yield returns, these people are focused on the uncertainty & ‘what if’ factor.

If you can categorize yourself amongst any of these, it can help you strategize your portfolio better. It makes your work easier than otherwise because now you know where you stand. You do not idealize a scenario because you know which side catches more of your attention. 

Portfolio Risk Assessment - The Final Words
The Final Words ~

Irrespective of the category, investors have one end goal- making better profits. It would not hurt to have someone or something that could make your work easier, who would take the stress off your shoulders and give you better returns. You have looked at the fundamentals of portfolio risk assessment, types of portfolio-level risks, and portfolio risk tolerance. 
To assess the risks associated with your portfolio, you can access a premium risk assessor tool (https://calculator.secvolt.com/) that will give you a transparent picture of the markets and where you stand in those markets. It assesses the inherent risk present in your portfolio and shows you what returns you have missed.

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Ashish Verma

Ashish Verma is the founder and CTO of Secvolt, with close to 10 years of experience in the IT industry. He has been the technical backbone of the company and has worked tirelessly to make the technical infrastructure robust. He is a passionate entrepreneur who generates solutions that have the potential to bring change.

In order to ease the client’s interaction with Secvolt, he has strived to develop the business’s technological foundation and establish a user-friendly platform. Ashish has also contributed substantially to smoothening the company’s administration and ensuring that there are no lacunae in the broad structure of the organization. 

Early Years

Coming from a middle-class family, he was aware of the problems that people faced while using technology. He sought to create something that was simple to use yet had a powerful effect. As he studied computer science, he became eager to offer a solution to real issues. He began his professional career at Amdocs, where he gained expertise in client management while catering to more than 20 clients. Later, he moved to Citicorp, where he had exposure to the investment industry. His time at Amdocs and Citi enabled him to produce high-standard, efficient, and scalable technical infrastructure.

He left corporate jobs for his startup because he was passionate about working on the concept of a smart city platform. He expanded the concept internationally and even collaborated with Global Dignity-Kuwait. Things didn’t work out for him the first time. He states, “My failures didn’t stop me from experimenting and trying new things.” He rose from the ashes like a phoenix and founded FewerClicks, an End to End IT solution company.

He worked on the creation of Solster Finance, a decentralized financial platform based on the Solana blockchain. He created this platform single-handedly which has helped the team raise a $1M investment and a revenue of more than $5M within 6 months of launching. 

He has previously worked on many blockchain technologies and cryptocurrency ventures, which include Decentralized Finance Applications (Defi), Decentralized Applications (Dapps), File Contracts (SIA, record-keeper), Smart Contracts (rust, solidity), and NFT Development. His experience and effective communication have helped many team members understand Secvolt effectively and the underlying technology it is powered by.

He possesses the ideal combination of strategic thinking and excellent business insight. He is responsible for formulating technical aspects of the company’s strategy to guarantee alignment with business objectives. With his drive to experiment with new technologies, he has helped Secvolt achieve a competitive edge. Being in charge, Ashish never holds back in encouraging the different departments to make profitable use of technology, helping to grow as an unstoppable team at Secvolt!

Hanif Shaikh

Hanif Shaikh is the founder and CMO of Secvolt, with over 8 years of experience in the industry. He plays a crucial role when it comes to the growth of Secvolt. Since the beginning, he has acted as a mentor for each and every employee of the company, and he makes an effort to be accessible to his staff anytime they need him. 

Hanif first entered the Blockchain and Crypto world in 2016, and nothing has stopped him since. He views blockchain as a transparent platform that provides authority and accountability back to the people. He consistently believes that “overcommunication is better than miscommunication.” He has lived by this motto with his staff, clients, and networks.

Early Years

Hailing from Gujrat, a state in India, he is following his dream to contribute to making this world a better place. In the process, he has struggled, made some mistakes, and learned lessons from those mistakes to achieve success in life. His entrepreneurial attitude dates back to his childhood when he learned from his father’s business and aspired to have it all. He came from a humble background and had ambitions to succeed in life.

He has developed two successful businesses from scratch, and in the process, he has inspired young people to start their own businesses. He was an integral part of the Quora Mumbai Meetups and helped it become a great success in a short period of time. Later, he began organizing meetups to raise awareness about blockchain, cryptocurrencies, and their applications. He also shared his knowledge of ICOs, highlighted reputable ICOs, and established a small cryptocurrency community on WhatsApp groups.

He chose to go on a Blockchain Tour in India in 2019 and met some fascinating people. Throughout his journey, he has been able to build an extensive and robust network that has aided Secvolt’s growth. Because of his expertise and understanding of the Crypto Industry, he has been featured on several news channels and has advised the youth on the subject.

He is in charge of the company’s marketing operations and is responsible for developing its marketing strategy and vision. He oversees a group of passionate marketing professionals and plans promotional strategies with the goal of making  Secvolt a global brand. 

He is a perfect blend of a practical attitude and innovative business acumen. He believes in the ability of individuals to perform exceptionally well when given an environment to experiment and explore their passions; a culture that he has built at Secvolt.

Divakar Choudhary

Divakar Choudhary is the founder and CEO of Secvolt who has been trading for more than six years now. He started the business in 2018 with the conviction that if anybody could dominate the market, it was him. He poured all of himself into the business and turned Secvolt into a market-beating machine.

Divakar developed the fundamental quant models that perform risk management and capture alpha using his skills from the previous organization and his time spent in the market. In order to make the system effective, he backtested risk mitigation algorithms and worked on them for more than 4 years to produce results.

Early Years

He began his crypto journey in 2013 after getting his first gaming Laptop and melded in with the Blockchain community like sunbeams on the ocean. He created many YouTube channels at the age of 15 and businesses by the time he was 17. Technology has always piqued Divakar’s interest. He endeavored and succeeded at freelancing in his effort to achieve financial independence. However, he soon realized that freelancing would always keep him in the rat race, and the only way out would be to build a machine yielding generational wealth.

Soon, he started trading using his own capital but suffered a loss in the market. He says, “95% of people lose money & the rest 5% make money from the loss of those 95%.” He then began working on an effective technique to be included in this 5% after losing part of his own assets during the early stages of trading. He began evaluating quant strategies using statistical models.

With his methodology, he once produced a 20% ROI in a single month. With the zeal of creating something exceptional, he borrowed money from friends and family and generated decent returns for them using primitive quant models. Month after month, the system’s efficiency and the competence of the man behind it allowed for excellent market returns.

In the beginning, Divakar worked on his laptop for over 18 hours. It took every ounce of his energy as he executed about 530+ deals daily for 4 years to create this company from the ground up. In 2021, he increased his volume by 827%, trading a total of $52 million and hitting a single account.

In his words-

“What does becoming “THAT” GUY mean to you? Who did you need when you were young? Be that person!”

He is a perfect example of someone who followed his passion and made a fortune from it! He dreamt of creating generational wealth as a youngster, envisioned it as an adult, and is now making it a reality with Secvolt!