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Active portfolio managementAn investor who follows an active portfolio management strategy buys and sells stocks in an effort to outperform a specific index, such as the S&P 500 or Russell 1000...

The first step: determine the appropriate asset allocationVerifying your individual financial position and goals is the first task in creating a portfolio. Important elements to consider are the age...

Eugene Fama, a Nobel Prize winner and researcher Kenneth French, two former professors at the University of Chicago's Booth School of Business, tried to better gauge market returns and found, through...

How does the P / E ratio workPrice-to-earnings ratio is a valuation measure that compares a company's earnings per share (EPS) to the current market price. This metric is widely known and used as an...

How much do you need to save?Financial advisers use different metrics to calculate retirement needs. Many suggest that clients accumulate enough savings during their working life to replace 70-85% of...

How to overcome investment hurdlesWe live in a culture of rights, and we expect instant gratification for the things we crave, whether it's the latest tech gadget, sushi, or a trip to Las Vegas...

Manage the currency in portfolioThe relationship between return on assets and the exchange rate is critical to international asset prices. The overall impact on the currency depends on the currency...

Operating marginThe operating profit margin is the profitability ratio that investors and analysts use to assess a company's ability to convert dollars of revenue into dollars of profit after...

Portfolio variance calculation for securitiesTo calculate the portfolio variance for the stocks in the portfolio, multiply the square weight of each stock by the corresponding stock variance and add...

Risk Management and PsychologyWhile this information may be useful, it does not fully address an investor's concerns about risk. The field of behavioral finance has contributed to an important...

1. Equities Over BondsWhile equities do carry a higher risk than bonds, a manageable combination of the two in a portfolio can offer an attractive return with low volatility.2. Small vs. Large...

Underperformance raises the question, if the US Equity Growth Fund does not equal or beat the Russell 3000 Growth Index, what value has the investment management added to justify its fees? Simply...

Risk management occurs everywhere in the world of finance. It occurs when an investor buys US Treasury bonds over corporate bonds, when a fund manager hedges his currency exposure with currency...

SWOT analysis is a method for evaluating the performance, competition, risk, and potential of a business, as well as a part of a business such as a product line, division, industry, or other entity...

Understanding Modern Portfolio Theory (MPT)Modern portfolio theory argues that the risk and return characteristics of an investment should not be considered separately, but should be judged by how the...