About Us

Dr Norman Sinclair CEO

IRISKONLINE

IRISKONLINE provides a forum in which INVESTORS and their ADVISORS can discuss portfolio construction and RISK CONSIQUENCES in detail - BEFORE the portfolio is actually implemented.

IRISKONLINE contains a sophisticated calculation engine that enables investors on the ASX to compute and analyse the risk structure of any portfolio of ASX listed securities you choose.

Now, Financial Advisors and their clients can address a very complex question that most investors choose to ignore - How risky is MY portfolio?

Knowing the answer to that question is essential for ALL investors and their Advisors - PRIOR to investing:

  • How well does your PORTFOLIO match your INVESTMENT STRATEGY?
  • Are you comfortable holding a portfolio at that LEVEL OF RISK?
  • Which SECURITIES and INDUSTRIAL SECTORS contribute the most RISK to your portfolio?
  • How you can ADJUST YOUR PORTFOLIO RISK  to attain an acceptable level of risk for you? and
  • Is the CONCENTRATION of that portfolio risk consistent with your EXPECTED RETURN?

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IRISKONLINE is focussed on estimating the EXTREME RISK OF LOSS for any portfolio of ASX LISTED securities that you may hold or intend to hold.

Indeed, the feasible portfolios you are modelling in IRISKONLINE, may be the one you decide to implement.

And, if that portfolio is implemented, the anticipated risks will become real portfolio risks requiring management.

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Have you ever wondered what the characterisation of the IDEAL portfolio for a successful RISK AWARE investor?

Well, here it is in a nutshell for the SMART IRISKONLINE user!

  • THEY PREFER LISTED SECURITIES: All of your investments will be listed on the Australian Stock Exchange ('ASX') - easy to buy/sell - no commissions; no advice required (except for RISK);

  • THEY AVOID UNLISTED SECURITIES DUE TO liquidity problems that might arise when buying/selling - and possibly remunerating 3rd Parties;

  • THEY HOLD SPECIFIC Exchange Traded Funds (ETF's) - that will EFFICIENTLY define the CORE of the CORE of the invested portfolio - to reduce COST;

  • THEY MAY HOLD SPECIFIC LISTED Direct Holdings representing investment areas of special interest - subject to acceptable RISK;

  • THEY WILL ENSURE THAT THE INVESTMENT STRATEGY IS IDENTICAL TO THE ACTUAL portfolio they want to hold - NO SLIPPAGE; and

  • THEY ALWAYS USE IRISKONLNE to ensure the overall portfolio risk is acceptable.

 

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STEP 1: IRISKONLINE COMPUTES THE RISKS OF SIGNIFICANT PORTFOLIO LOSSES.

 

A meaningful statement of portfolio risk - both NORMAL and NON-NORMAL.

RISK AVERSE investors are assumed to avoid/mitigate extreme portfolio losses that might impact your portfolio from time to time.

These potential losses are to be found in LEFT TAIL of your portfolio's return distribution.

STEP 2: IRISKONLINE HELPS YOU MANAGE PORTFOLIO RISK.

 

A Simple Portfolio Risk Acceptance Criteria.

"In any month, there is a 5% chance that the value of your portfolio could decrease by X% and, if this occurs, the expected loss for your portfolio could be Y%"

Where: X% is the Modified Value at Risk ('MVAR') and Y% is the Modified Expected Shortfall ('MES') that together characterise the expected loss in the left tail of the return distribution.

Your personal risk aversion will reject ANY PORTFOLIO with an expected loss equal to or worse that y%.

 

STEP 3: IRISKONLINE HELPS YOU TO SET ACCEPTABLE LEVELS OF RISK AND MONITOR THEM OVER TIME.

Easily identify where your portfolio risk is concentrated.

"An extreme portfolio loss for your portfolio is attributed to individual securities; industries; and growth/income dimensions represented in the portfolio."

STEP 4: IRISKONLINE HELPS YOU MANAGE RISK BREACHES AT EVERY STAGE OF YOUR PORTFOLIO MANAGEMENT.

Use RISK LIMITS, RISK ALERTS and RISK CONTROL CHARTS to manage AND control your Portfolio risk.

RISK AVERSE investors are assumed to avoid/mitigate extreme portfolio losses that might impact your portfolio from time to time.

"Manage the expected loss for the entire portfolio as attributed to individual securities; industries; and sectors under your control."

 

 

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GETTING STARTED IS EASY!

 a) CREATE AND NAME A PORTFOLIO SLOT e.g. MY INVESTMENTS.

 b) FOLLOW THE PROMPTS TO ENTER SECURITIES YOU INTEND TO HOLD IN THAT PORTFOLIO - AND THE NUMBER OF UNITS YOU WANT TO HOLD IN EACH SECURITY.

 c) SAVE YOUR MODEL PORTFOLIO FREQUENTLY AS YOU BUILD AND OBSERVE THE RISK RESULTS.

 d) CHECK THAT THE ESTIMATED PORTFOLIO RISKS ARE ACCEPTABLE TO YOU BY KEEPING A CLOSE EYE ON THE INFORMATION IN YOUR PORTFOLIO RISK PANEL.

e) EXPLORE THE RISK CONTROL STEPS

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YOUR PORTFOLIO RISK PANEL WILL DISPLAY THE KEY RISK RESULTS FOR YOUR PORTFOLIO.

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 REMEMBER: You may intend to have YOUR MODEL PORTFOLIO IN IRISKONLINE as a prototype for YOUR REAL PORTFOLIO WHEN INVESTED on the ASX. Then, you can LOCK_IN that PORTFOLIO RISK BEFORE IMPLEMENTATION

Note that there are also detailed result tables in IRISKONLINE (not shown here) that inform you about the 'marginal' impact on your portfolio's overall risk profile - by security and sector. Most importantly, that detailed risk analysis may suggest that you have too much risk generated by one or more securities. If required, you can then adjust your portfolio and re-estimate the risk results.

GETTING THE CORRECT PERSPECTIVE FOR YOUR PORTFOLIO RISK STATEMENT:

FRAMING PORTFOLIO RISK INFORMATION PROVIDED BY IRISKONLINE

Congratulations!

You now have an estimate of the EXPECTED EXTREME LOSS your portfolio could experience in any month!

Here is an example of the technical language we adopt at this point!

"The portfolio risk analysis panel (above) suggests that there is a 5% chance this portfolio could lose 3.23%

of its current value in any given month and if this were to happen -

the expected loss for this portfolio is estimated to be 4.08%."

You may want to work through that information in your head. Easy to visualise and quantify.

Once you get it ---- all is revealed!

 

JOB DONE: IRISKONLINE now contains the exact risk outcomes you are likely to bear if you immediately buy/sell the defined securities held in the current portfolio.

 

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YOU ALSO NEED TO THINK ABOUT ONGOING PORTFOLIO MANAGEMENT?

Over time, your risk tolerance may change - from 'aging' - and even when you begin to get familiar with the evolution of your portfolio and its risk over time - you may make some changes.

 

STRAIGHT TO THE POINT!

How much extreme risk might your portfolio generate in any month?

Which securities/sectors in your portfolio are likely to drive that risk?

Is the risk of loss attributable to securities you considered risky - or not?

 

Having launched a portfolio with it's holdings/prices - changes in markets will inevitably raise the question of REBALANCING. Do we? or don't we? And, what about market timing?

I will discuss those issues in a forthcoming BLOG.

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What does this mean for you - the Australian Investor?

IRISKONLINE puts you in the 'driving seat' with full knowledge of the risks your portfolio represents to you. You will be amazed by the speed with which you uncovered those important facts in some portfolios!

Within seconds of login, you will start to define and experiment with securities you may want in your portfolio - and how much you might invest in each. But, most importantly, at all times - you will know exactly:

1.   How much risk your overall portfolio creates at each stage; and

2.   Where that risk is concentrated in the securities you have selected; and by their industrial sectors and growth/income potential;

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What could this mean for your relationship with your Financial Advisor?

For most Financial Advisors; many Fund Managers and most of your investing friends - this is probably a new frontier they need to tame!

1. You will probably REJECT the use of UNLISTED INVESTMENT FUNDS from the 1980's or any other such product (with commision payments to Advisors) and flock to the EXCHANGE TRADED FUNDS (ETF's) traded on the AUSTRALIAN STOCK EXCHANGE (ASX). (Note: I will discuss and reveal the power of ETF's in an unpcoming blog)

2. You will ensure that your investments are continuously priced in a fair and open market where innovation is open, continuous and unbiased. No commissions eroding your wealth!

3.  If/when you need to consult a Financial Advisor, the discussion will be about YOU and YOUR investment portfolio of listed securities - and YOU will be in the driving seat - where you belong!

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IRISKONLINE is a 'game-changer' for anyone currently investing in ASX listed securities - or who intends to establish a portfolio of LISTED SECURITIES.

A major motivation for building IRISKONLINE was to empower all Australians needing a boost to their propensity save and invest sensibly.

A new measure of PORTFOLIO RISK is introduced that is easier to understand and more intuitively used as 'expected portfolio loss'.

In the finance literature, these risk estimates are referred to as, Modified Value at Risk (MVaR) (a calculated cutoff point), and its inclusive counterpart, Modified Expected Shortfall (MES) (the average loss beyond and including ('MVaR')). Yes you may have to roll that one around in your head for a time .... but they do estimate RISK as reflected in extreme 'left tail' of your portfolios 'left tail' of your portfolios estimated negative monthly returns.

IRISKONLINE shifts the portfolio risk perspective to the precise estimation of 'extreme portfolio loss'. And, your decision to REJECT or ACCEPT any portfolio as determined by your aversion to EXTREME PORTFOLIO LOSS.

Later, in the blogs, I will take you into different aspects of IRISKONLINE, where we will see how easy it is to get major insights into the RISK of ANY investment portfolio you build using REAL securities listed on the the Australian Stock Exchange.

Now, many of you probably think you know quite a lot about portfolios and investing ....  without needing to use IRISKONLINE .... so I challenge those investors to give it ago .... remember a $ in your portfolio is better placed than in the hands of Advisors; Brokers; and any others.

This thinking if consistent with ideas of the GREAT investors from the past - Benjamin Graham ('The Intelligent Investor'); and John Bogle (the Founder of the Vanguard Group)

Take your time! It is a learning curve that will will benefit you and your family well into the future.

 

CREATING A WELL DIVERSIFIED PORTFOLIO AND MANAGING ITS RISK has never been easier.

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IRISKONLINE presentations will be created for Australian Women in particular to:

  • Motivate, teach and assist all Australians currently investing or intending to invest wisely on the Australian Stock Exchange ("ASX");

  • Financially emancipate Australian Women by revealing financial pathways to a better economic future; and

  • Assist approved charitable organisations in Australia and India that are dedicated to the education and welfare of young ladies of all cultures and denominations.

 

As I take to the road in mid 2021, I look forward to meeting as many fellow Australians as possible - seeking to understand and document their specific financial needs and investment solutions.

This is ONLY the beginning!

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Here are some very useful links to explore if you are feeling down for whatever reason - by women for women.

https://www.womenandmoney.org.au/

https://www.wire.org.au/

https://www.financialcounsellingaustralia.org.au/

https://managersandleaders.com.au

https://www.womentalkmoney.org.au