Editing Portfolio Theory (section)

== <span style="color: #FFFFFF;">Analyzing</span> ==
{| class="wikitable"
|+ Systematic vs. Unsystematic Risk
! Feature !! Systematic (Market) !! Unsystematic (Specific)
|-
| Source || Global events (Inflation, War) || Internal events (Product failure, Fraud)
|-
| Solution || None (You can't hide) || Diversification (Own 30+ stocks)
|-
| Reward || The market pays you for this || The market does NOT pay you for this
|-
| Analogy || A 'Storm' at sea || A 'Hole' in your specific boat
|}

'''The Concept of "Mean Reversion"''': Portfolio theory assumes that over the long term, things tend to go back to their average. If a stock is "Overpriced," it will eventually fall. If it is "Underpriced," it will eventually rise. Analyzing the "Distance from the Mean" is how professional investors decide when to "Rebalance" their portfolio.
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