3. Talk through any discrepancies in their risk profile assessment. 4. Explain how their current portfolio lines up with their risk comfort. 5. Keep investors focused on what they can control.

The formula for calculating covariance takes the ... Adding assets with a negative covariance to a portfolio reduces the overall risk. This risk drops off quickly at first as additional assets ...

Assume a (very successful) portfolio returned 15% with a 10% standard deviation. The risk-free rate of return is 4%. Knowing these numbers allows an investor to calculate the portfolio's Sharpe ...