Non-Systemic Risk

A successful voyage of the Dutch East India Company ships brought great returns, but statistically, one sailing ship in three returned home - the others could not withstand storms and pirate raids. It was necessary to assure on paper the responsibility for the ship and to determine how much return everyone who had rights to the ship would receive. This is how the company became the first stock company in the world - it issued securities in the early seventeenth century.

Every beginning investor, having defined his investment objectives and risk profile, thinks about how to structure his portfolio so that it meets his needs. There are a large number of financial instruments on the market and the question of proper portfolio structuring is more relevant than ever.