Portfolio Planning

Those optimal portfolios which provide the highest return for a given risk make up the Efficient Frontier. A portfolio can help reduce idiosyncratic risk but not systemic or market risk. We discussed how to build a portfolio in our blog “Portfolio Construction and Rebalancing.” In this blog, we will review a few key financial engineering […]

Portfolios provide middle-of-the-road performance when compared to its constituent positions but at a much lower volatility. Rebalancing is aimed at improving the performance while reducing volatility even further. We compared the performance of stocks, bonds, commodities and real estate in our blog “Asset Classes 30-Year Performance History.” Here we will use these asset classes to

The order of performance based on comparison of a representative sample from each of the 4 asset classes, from highest to lowest: stocks, bonds, real estate, and gold. We discussed the makeup of asset classes in our blog “Types of Asset classes.” The 4 asset classes, which are Stocks, Bonds, Commodities and Real Estate, are

Uncorrelated asset classes have different boom/bust cycles. Capitalize on these by including them in a portfolio and keeping the portfolio rebalanced. We explained the basics of the many commonly used asset classes in our blog “Types of Asset Classes.” In this blog, we will review how peak performing asset classes cycle through with different boom

Annualized return is ≈10% with a 17% volatility. Three quarters of annual returns were positive. Let us analyze how the S&P 500 index performed over the last 50 years (1970-2019). This histogram of annual returns shows that the number of years when the index return was negative, between 0-10%, 10-20% or >20%, are roughly equal.

Categories and characteristics of widely used asset classes such as US/Foreign Stocks, Sectors, Bonds, Commodities and Specialties. There are many ways to categorize asset classes. Let us review some of the more common asset classes. Many of these assets can be invested in as individual positions or as a basket using Mutual Funds or ETFs.