Risk Metrics
When selecting instruments for their portfolio, investors should pay close attention to risk metrics, which are equally important as return metrics.
Key metrics that we calculate for assessing and comparing the risk of the ViFinance US Stocks Index with the S&P 500 Index are as follows:
In addition, we pay attention to the speed of recovery after drawdowns, the Beta coefficient and Standard Deviation.
Every quarter, we calculate and publish key risk indicators for ViFinance US Index and compare them with the S&P 500 Index (Quarterly Values):
Key metrics that we calculate for assessing and comparing the risk of the ViFinance US Stocks Index with the S&P 500 Index are as follows:
- Sharpe Ratio - the higher, the better
- Coefficient of Variation - the lower, the better
- Maximum Drawdown - the lower, the better
In addition, we pay attention to the speed of recovery after drawdowns, the Beta coefficient and Standard Deviation.
Every quarter, we calculate and publish key risk indicators for ViFinance US Index and compare them with the S&P 500 Index (Quarterly Values):
Maximum Drawdown Overview (Since Inception of ViFinance US Stocks).
The maximum drawdown occurred in February-March 2020 during the COVID-19 crisis and amounted to 33.38% for ViFinance US Stocks and 34.06% for the S&P500. ViFinance US Stocks recovered to its previous levels in July 2020, while the S&P500 recovered in August 2020.
The maximum drawdown occurred in February-March 2020 during the COVID-19 crisis and amounted to 33.38% for ViFinance US Stocks and 34.06% for the S&P500. ViFinance US Stocks recovered to its previous levels in July 2020, while the S&P500 recovered in August 2020.
It's worth remembering that there's always the risk of overall market decline (Systematic Risk) due to global economic factors, crises, panics, etc. In such moments, market downturn affects the value of all companies, even those with the highest quality businesses and resilience. "The rising tide lifts all boats, but the ebbing tide lowers them."
It's important to note that the ViFinance US Stocks Index and portfolios constructed according to it are more concentrated, containing fewer companies than the S&P500. Therefore, the Non-Systematic Risk (related to individual companies) is higher. There's always a possibility that the performance of a specific company might suffer due to unpredictable factors (such as the emergence of new technologies and rapid shifts in consumer preferences, as seen with Kodak and Nokia).
We make every effort to ensure that the ViFinance US Stocks Index and our portfolios consist of companies with the best business quality, competitive advantages, and resilience to potential crises and market crashes. We believe that these are the companies capable of weathering any storm with minimal losses, swiftly adapting to constantly changing conditions, that these are the winning companies, with the lowest likelihood of disruption.
It's also important to emphasize that the Author himself is in the same boat with the investors and allocates over 90% of his stock assets in accordance with the proportions of the ViFinance US Stocks Index. The author fully supports ViFinance's ideas with his capital, receives the same distribution of returns as the investors.
It's important to note that the ViFinance US Stocks Index and portfolios constructed according to it are more concentrated, containing fewer companies than the S&P500. Therefore, the Non-Systematic Risk (related to individual companies) is higher. There's always a possibility that the performance of a specific company might suffer due to unpredictable factors (such as the emergence of new technologies and rapid shifts in consumer preferences, as seen with Kodak and Nokia).
We make every effort to ensure that the ViFinance US Stocks Index and our portfolios consist of companies with the best business quality, competitive advantages, and resilience to potential crises and market crashes. We believe that these are the companies capable of weathering any storm with minimal losses, swiftly adapting to constantly changing conditions, that these are the winning companies, with the lowest likelihood of disruption.
It's also important to emphasize that the Author himself is in the same boat with the investors and allocates over 90% of his stock assets in accordance with the proportions of the ViFinance US Stocks Index. The author fully supports ViFinance's ideas with his capital, receives the same distribution of returns as the investors.
Disclaimer: All investments carry risk. Performance quoted represents past performance and does not guarantee future results. There is no guarantee that investment in any stocks or stock portfolios will result in profits or that they will not result in losses.
Investing in portfolios constructed according to the ViFinance indices may not be suitable for everyone. We do not recommend investing in stocks if it doesn't align with your risk profile and the timeline of your financial goals (less than 5 years).
Investing in portfolios constructed according to the ViFinance indices may not be suitable for everyone. We do not recommend investing in stocks if it doesn't align with your risk profile and the timeline of your financial goals (less than 5 years).