|
|
| Portfolio Management
Constructing Portfolio Using ETFs February 6, 2010 Having the right mix of stocks, bonds, cash, and commodities in your portfolio, and being well diversified within each asset class, can have a profound impact of your returns. ETFs
can be an easy way to gain this diversification. They can be cheap,
flexible, and tax-efficient and may help you gain access to sectors and
asset classes that would otherwise be closed off to individual
investors. Continue reading
Index Investing: Track the Market with Passive Strategy October 15, 2009 More institutional investors, especially pension funds, are applying index-investing strategy by shifting their assets from active managers to index funds. Poor
investment performance of active managers in the recent bear market caused
the significant net inflow into index funds. Acceleration of
institutional investment moving toward the passive strategy spiked in
the second half of 2008, particularly after the bankruptcy of Lehman
Brothers Holdings in mid-September. In the
miserable bear market, index funds may not look very attractive. But it
turns out that it is the extremely rare actively managed fund or hedge
fund, after fees and taxes, beat a simple index fund. Studies show that
very few actively managed funds, including those with impressive
short-term performance records, provide better-than-benchmark returns
over long periods of time. Continue reading
Index Investing Supremacy September 24, 2009 Recent
studies provided more evidence that the failure of active management in
beating their benchmark index is replicated across almost all
categories, not only U.S. stock funds but also bond funds and even
emerging-markets funds. What's more, those numbers are similar to the
previous five-year cycle. The numbers come from S&P and are
supported by research from Morningstar Inc. A new
study by Mark Kritzman found that it is very hard, if not impossible,
to justify active management for most individual, taxable investors
over a long term. To break even with the index fund, net of all
expenses, the actively managed fund would have to outperform it by an
average of 4.3 percentage points a year on a pre-expense basis. Only
miniscule percentage of domestic equity mutual funds in the Morningstar
database beat the Standard & Poor’s 500-stock index by at least
four percentage points a year, on average. Continue reading
Investment Options
To Construct Asset Allocation Portfolio
To
capture the benefits of diversification and asset allocation, you will
want to build a portfolio of several asset classes that are somewhat
uncorrelated. You have a few options for building such a portfolio. Read more
Argument for Asset Allocation February 1, 2009 Stocks,
bonds, and real estate are all getting beaten in this bear market and
economic recession. Even commodities, which often don’t move in tandem
with equities, are plummeting along with stocks.
Asset Allocation
Asset
allocation is an investment portfolio technique that aims to balance
risk and reward by distributing a portfolio's assets among major
categories of asset classes according to an individual's goals, risk
tolerance and investment horizon. Read more
| |
|