And secondly why is an equity investment more risky??
fundamental risk Definition
Exposure to loss from a situation affecting a large group of people or firms, and caused by (a) natural phenomenon such as earthquake, flood, hurricane, or (b) social phenomenon, such as inflation, unemployment, war.
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A fundamental idea in finance is the relationship between risk and return. The greater the amount of risk that an investor is willing to take on, the greater the potential return. The reason for this is that investors need to be compensated for taking on additional risk.
For example, a U.S. Treasury bond is considered to be one of the safest (risk-free) investments and, when compared to a corporate bond, provides a lower rate of return. The reason for this is that a corporation is much more likely to go bankrupt than the U.S. government. Because the risk of investing in a corporate bond is higher, investors are offered a higher rate of return.
A stock you own may declare bankruptcy, thus making your stock worthless. The gov't will likely not declare bankruptcy.
Definition of 'Risk'
http://www.investopedia.com/terms/r/risk...
Benjamin Graham was a scholar and financial analyst who is widely recognized as the father of value investing. His famous book, "The Intelligent Investor", has gained recognition as one of the best and most important investment pieces written illustrating the fundamentals of a value-investing strategy.
Benjamin Graham had a profound influence on his pupil Warren Buffett, who would become the most famous investor of all time, in grad school at Columbia University. Graham instilled the fundamental principles of value investing into Buffett - principles upon which he relied to amass one of the world's largest personal fortunes.
The Value Investor's Handbook
http://www.investopedia.com/articles/fun...
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Firstly what is an easy definition of fundamental value?
And secondly why is an equity investment more risky??
