Focus on the downside

摘要

Have you ever heard anyone complain that a mutual fund was too risky because it made money? Of course not. Yet the most popular measure of fund risk—the variance of monthly returns around a mean—is based equally on how much fund prices rise and how much they fall. That could be a mistake, says Frank Sortino, a former finance professor and an expert on investment risk. And the mistake could lead to bad decisions about how to invest.