Five questions every high-net-worth investor should ask about their portfolio

A professional risk desk does not look at a portfolio once. It asks the same handful of questions again and again, because each one catches a different kind of surprise. You can ask them too.

1. How much could I lose in a bad month?

Start with value at risk, in dollars, at your real portfolio size. It sets the scale for everything else.

2. Where is my risk concentrated?

Capital and risk are not the same thing. A position that is 20% of your money can be 22% of your risk, or 35%. Look at each holding's share of the risk, and at how much sits in one sector. The goal is not to remove concentration, only to know about it.

3. What happens in a crisis?

Replay past market shocks on today's holdings: a sharp crash, a rate shock, a currency move. Seeing the dollar loss for a scenario you remember is far more useful than an abstract statistic.

4. What would it cost to hedge?

Index futures, puts and collars protect in different ways and cost different amounts. A good comparison shows both: how much of the fall each one covers, and what it costs per year. Protection is never free, so the question is which price you are happy to pay.

5. Could I actually sell?

A position you cannot exit is a risk of its own. Liquidity means days to sell without moving the price, and the cost of moving it. Mid and small positions, and private holdings, deserve the closest look.

AVALON answers all five in one report and writes what each chart means in plain English. This article is for education and is not investment advice.