Standard deviation and probability are concepts that make us better risk managers because they cause us to consider lower probability outcomes when making investment decisions. The post Standard Deviation, Probability, and Risk When Making Investment Decisions appeared first on Arbor Asset Allocation Model Portfolio (AAAMP) Value Blog.
Modern Portfolio Theory was developed in the 1950‘s with the belief that portfolio returns could be maximized for a given amount of investment risk by combining assets in a particular manner. The theory is that, using relationships between risk and return such as alpha and beta, and defining risk as the standard deviation of return, an ‘efficient frontier‘ for investing can be identified and exploited for maximum gain at a given
Arbor Investment Planner recognizes the need for an ETF Portfolios Guide. The goal is to assist the apprentice investors in their portfolio management decisions. The explosion in the number of ETFs means there is a large variety of ETFs to choose from today. ETFs are the perfect investment vehicle for the apprentice investor, investors with small portfolios, or investors with large portfolios who want significant diversification in a targeted ge
The market capitalization calculation is an important and useful stock valuation formula for investment analysis. Market capitalization (a.k.a. market cap) is the total market value of all the company‘s outstanding equity shares. This represents the total value the market has placed on the value of a company‘s common stock. The post Market Capitalization: Calculation and Categories appeared first on Arbor Asset Allocation Model Portfo
The post Asset Allocation By Age : A Rule of Thumb to Forget? appeared first on Arbor Asset Allocation Model Portfolio (AAAMP) Value Blog.
The post Reinvesting Dividends Benefits appeared first on Arbor Asset Allocation Model Portfolio (AAAMP) Value Blog.
Use investment diversification of non-correlated assets to minimize unsystematic risk. This is the only ‘free ride‘ available to portfolio managers. The post Investment Diversification appeared first on Arbor Asset Allocation Model Portfolio (AAAMP) Value Blog.
The Gross Profitability Ratio is gaining credibility in value investing circles because it provides valuable and predictive qualitative analysis when combined with valuation metrics. Some analysts argue it is the single best qualitative metric with which to compare multiple stocks (particularly within the same industry) that have already been determined to be bargains. The post Gross Profitability Ratio - Qualitative Analysis appeared first on Ar
Buy and Hold is considered by many to be the holy grail of investing. Its current popularity has become a cult-like strategy that draws criticism to its critics and disdain towards those who dare speak out against the beloved investing strategy. So buy and hold works.until it doesn‘t. People will quote all kinds of statistics ‘proving‘ that buy and hold works. Its the trend of our day. This is nothing new. Bull markets make buy
There are 3 main types of investors today; each with their own characteristics and results: The buy high sell low investor, the index investor (passive management), and the value investor. The post 3 Types of Investors - Which Type Are You? appeared first on Arbor Asset Allocation Model Portfolio (AAAMP) Value Blog.
Over diversification is a serious and common mistake that decreases investment returns disproportionately to the benefits received. The post Over Diversification: Hurting Your Investment Returns? appeared first on Arbor Asset Allocation Model Portfolio (AAAMP) Value Blog.
Free Cash Flow determines whether a company has sufficient cash resources to meet the goals of the entity and its‘ stakeholders (debt reduction, dividends, stock buybacks, acquisitions, etc.). Free Cash Flow Yield determines if the stock price provides good value for the amount of free cash flow being generated. The post Explain Free Cash Flow and Free Cash Flow Yield appeared first on Arbor Asset Allocation Model Portfolio (AAAMP) Value Bl
Recognizing the differences between saving, investing, and gambling will help you compartmentalize each, and avoid common mistakes. It‘s an easy mistake because not enough people think it through, and the terms are used interchangeably in our culture. Keeping saving, investing, and gambling three separate activities in your mind and in your account structure will help you be more successful managing your money and growing your wealth. The p
The most important attribute of successful investors is discipline in following a set of investment strategies and rules. In other words you don‘t have to have a high IQ, a high education, extensive experience, or even great instinct. You can be a successful investor by being disciplined in following a set of investment strategies and rules that guide you through bull and bear markets, times of greed and times of fear, and periods of high r
This inflation guide explains why the inflation trend should be a major consideration in your portfolio asset allocation. Then we examine each inflation trend and analyze which asset allocation categories should be considered or avoided for increasing inflation, disinflation, and deflation. The post Inflation Guide: Asset Allocation Based on the Inflation Trend appeared first on Arbor Asset Allocation Model Portfolio (AAAMP) Value Blog.