For assessing whether and how much of an asset to hold, the important consideration is the asset's amount of

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When assessing how much of an asset to hold, it is important to consider its nondiversifiable risk, also known as systematic or market risk. This type of risk cannot be diversified away and is caused by macroeconomic factors such as changes in interest rates, inflation, and geopolitical events. By understanding an asset's nondiversifiable risk, an investor can better determine the appropriate amount to hold in their portfolio to achieve a desired balance between risk and return. Factors such as diversity, relative risk, and absolute risk may also be important considerations, but nondiversifiable risk is the most significant factor.

For Assessing Whether and How Much of an Asset to Hold