Hallycon Academy

Course 9 · Next step

Risk and diversification

What risk really is, how deep falls can go, how spreading your money helps, and why leverage is a different game.

  • 7 lessons
  • 49 min
  • Free
  • A certificate when you finish

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Who it is for

For anyone who invests or plans to, and wants to know how deep a fall can go and how to spread their money so that one failure does not sink the plan.

The lessons

Each lesson has a short video, a quiz and links to learn more. The full lessons open after a free sign-in.

  1. Lesson 1: What risk really means

    7 min

    Risk is more than losing money: swings, permanent losses, inflation, currencies and not being able to sell. And the 1-to-7 score on every key information document.

    Key points

    • Risk means the result can differ from what you hoped, in both directions.
    • Higher possible returns come with higher risk; "high return, no risk" does not exist.
    • The key information document scores risk from 1 (lowest) to 7 (highest); read it before you buy.

  2. Lesson 2: Your risk level: ability, need and comfort

    7 min

    How much risk you can afford, how much you need and how much you can stomach. The sleep test, and why your bank asks all those questions.

    Key points

    • Ability: how much you could lose without harming your life plans.
    • Need: how much growth your goals require; comfort: how you feel and act when prices fall.
    • The lowest of the three sets your level; banks must ask before advising you (MiFID II suitability).

  3. Lesson 3: Don't put all your eggs in one basket

    7 min

    Spread across companies, countries and types of investment. Why one company can go to zero while a broad index barely notices.

    Key points

    • One company can lose everything; an index of hundreds loses one member and carries on.
    • Spread across countries too: Japan's Nikkei 225 took about 34 years to regain its 1989 peak (historical).
    • Your job and your home already depend on your country; don't add your employer's shares on top.

  4. Lesson 4: Time horizon: when will you need the money?

    7 min

    Money you need within about three years doesn't belong in shares. Why longer periods have smoothed the swings in the past, and why one pot per goal helps.

    Key points

    • Short-term money belongs in cash or similar; shares have fallen by more than 30% within weeks (history).
    • Single years swing widely; over longer periods results have varied less in the past, but bad long stretches happened too.
    • Give each goal its own pot and its own risk level.

  5. Lesson 5: Drawdowns: how deep it can go

    7 min

    The maths of losses: a 50% fall needs a 100% rise to recover. How deep past falls went and how long recoveries took.

    Key points

    • A 20% loss needs 25% to recover; 33% needs 50%; 50% needs 100% (arithmetic).
    • World shares fell by more than half from 2007 to 2009 (MSCI World, historical).
    • Decide your worst acceptable year in euros or francs, not only in percent.

  6. Lesson 6: Leverage and complex products

    7 min

    Borrowed money multiplies gains and losses. CFDs, turbos, leveraged ETFs, options and structured notes in plain words, and why beginners skip them.

    Key points

    • Leverage makes small moves big: at 10:1, a 10% fall wipes out your stake.
    • CFDs, turbos and leveraged ETFs are built for short-term trading; studies cited by ESMA in 2018 found 74–89% of retail CFD accounts lost money.
    • "Capital-protected" notes are only as safe as the bank that issues them: holders were hit when Lehman Brothers failed in 2008.

  7. Lesson 7: Position size and rebalancing

    7 min

    Keep any single idea small, bring your mix back once a year, and know what a stop-loss can and can't do.

    Key points

    • Keep any single company or idea to a small share of your money.
    • Once a year, move your mix back to your plan: sell a little of what rose, buy what fell.
    • A stop-loss sells after a fall; in a fast market it can sell far below your limit.

What’s inside

  • Short videos: About two minutes for each lesson
  • Quizzes: Three questions after each lesson
  • Calculators: Inflation, compound interest, an emergency fund and fees
  • Certificate: For every course you complete

The full lessons, videos and quizzes open after a free sign-in: your name, email, mobile number and a PIN. No card, no obligation.

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General financial education. Hallycon Academy does not manage money, sell investment products or give personal advice. Examples in the lessons promise no return.

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