Weigh Your Portfolio's Risk at These Three Sites

Few people -- and I'm one of them -- really understand the risks we take when we build our portfolios. Is that biotech stock that climbed 17% last month really worth the risk -- because it might just as easily drop 23% on a day's worth of bad news? Is that cold-as-clay mining stock even riskier -- given that it has returned zilch over the past five years?

A handful of new Web sites will crunch the numbers for you and provide answers to questions like these. Visiting RiskGrades, Total Sum and PortfolioScience.com is a little like taking your portfolio to the doctor for a checkup. You may discover festering problems that have contributed to your performance fatigue, or -- worse -- a ticking time bomb that could send your holdings into arrhythmia at any moment. Here's a quick tour of all three sites.

RiskGrades

This site was launched by a company called RiskMetrics, once a part of J.P. Morgan. RiskMetrics has provided risk analysis on holdings of large institutions since 1994. Enter the stocks, bonds or funds you own, and the site generates a revealing chart that compares the risk levels of each holding vs. its potential rewards. Stocks or bonds plotted above the red line on the chart provide sufficient reward potential for the risks they carry. Those that fall below the red line don't. What could be simpler? ...