Nobel prize winning harry Markowitz: “for every level of investment risk there is a combination of assets that lead to the highest possible return”.
The central concept of Modern Portfolio Theory relates to the concept of the “efficient frontier”. Every point on the convex curve represents a portfolio mix with an asset allocation that gives the [...]
Archives for June, 2009
Portfolio Theory: Efficient Frontier
Categorized in Investing Basics
Asset Allocation in a Nutshell
Research was conducted on the return of ninety-one pension funds managed between 1974 through 1983 and it was found that an average of 91% of the variations in return of the portfolios could be explained by asset allocation. Contrary to the conception of many beginner investors, the timing of investment and the choice of individual stocks [...]
Categorized in Investing Basics
Member Login
Random Blog Authors
Tags
- ABS Accounting Standards Codification X FASB Accounting Standards Codification Accrual Basis of Accounting AFS Asset Allocation Available-for-sale Biotech Bonds Bottom Up Investing Business Form CMBS constant dollar accounting copyright credit spread efficient frontier Equity Fair Value Fair Value Definition under IFRS and US GAAP FAS 157 FASB Accounting Standards Codification™ FSP FAS 157-4 fundamental analysis Held-to-maturity HTM Installment Sales Method Limited Liability Company Matching Principle P/E partnership patent Portfolio Management portfolio theory Price Earnings Ratio Return on Equity RMBS ROE Securitized Products SFAS 89 sole proprietorship technical analysis Top Down Investing trade date accounting trademark trade secret Trading