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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Unsystematic Risk

Definition:

Risks that are caused by lousy decisions—having a lousy investor or investing in bonds when you should have bought stocks—as opposed to major disasters.

See systematic risk for the opposite

Example

You think you're smart. You bet the ranch on new IPO whatever.com...and end up giving the ranch to your broker.

That's unsystematic risk because you're the problem. Moral: don't bet the ranch. And if you aren't a pro investor with all the training, just buy an index fund and go play golf. At least you'll get a nice tan out of it.