Do-It-Yourself financial and investment planning Excel spreadsheet software
<<– Continued from Part 1 Financial Planning Software for Home Use In addition to showing that large numbers of additional stocks are required to achieve measurable improvements in diversification, the Evans and Archer study clarified other requirements for a well-diversified portfolio. The number of stocks selected for a highly diversified portfolio also depends on what […]
A well-diversified portfolio contains a very large number of individual stocks and/or bonds that are selected without bias toward particular economic segments. A fully diversified portfolio will approximate the global publicly traded securities markets. The question about diversification most frequently asked by individual investors is “how many stocks or bonds do I need to be […]
For holding periods of many years, diversification improves dramatically, when you hold multiple actively-managed mutual funds in an investment portfolio. In “How Many Mutual Funds Constitute a Diversified Mutual Fund Portfolio?,” Professor Edward O’Neal of the University of New Hampshire at Durham tackled the important question of how much an investor could improve on diversification […]
Actively-managed mutual funds are not created equally. Performance can vary significantly – even when funds pursue similar strategies or “styles.” This article addresses the impact on portfolio diversification of holding more than one actively-managed mutual fund. (For the companion article to this, see: How many mutual funds are needed for a well-diversified portfolio? – a […]
Another kind of investment diversification that individual investors should consider important relates to the failure or corruption of the financial industry intermediaries and fiduciaries that hold individual investors’ securities. This meaning of diversification has nothing to do with scientific investment principles related to optimal portfolio diversification. However, it is still very important. Prudent investment practices […]
From the perspective of holding a well-diversified investment portfolio according to scientific investment principles, the objective of diversification is to minimize or eliminate ‘unsystematic risk’ or those risks that are not related to the price volatility of the overall securities markets. When people speak of investment diversification, they may mean different things. Therefore, clear definitions […]
Part 3 of the The Never-Do List – 22 Good Ways to Avoid Financial Advisor and Investment Counselor Frauds and Scams This article discusses things that you should “never do” with a financial planner or investment advisor, and it covers unsolicited advice, sales pressure, and account decision-making discretion. You should never do certain things with […]
Part 2 of the The Never-Do List – 22 Good Ways to Avoid Financial Advisor and Investment Counselor Frauds and Scams This article discusses things that you should “never do†with a financial planner or investment advisor, and it covers fees, payments, and proprietary investments. You should never do certain things with a financial planning […]
Part 1 of the The Never-Do List – 22 Good Ways to Avoid Financial Advisor and Investment Counselor Frauds and Scams This article discusses things that you should “never do†with a financial planner or investment advisor, and it covers adviser selection, contracts, signatures, and ownership title of your assets. You should never do certain […]
Avoiding financial advisor and investment counselor frauds and scams – Overview The best way to avoid being defrauded or scammed by a financial or investment advisor is to investigate carefully several different advisers before hiring one of them. If you carefully choose a financial adviser or investment counselor, you have a far greater chance of […]
Efficient market pricing is the theory that all known information is already reflected in current securities prices. Efficient securities market pricing has become very widely accepted within the investment community. The preponderance of evidence is that securities markets are efficient and tend to reflect available information. Whether you believe markets are efficient is very important […]
Securities markets are usually very quick to adjust prices to reflect new information. However, this price adjustment process may take longer and be more volatile, if the new information is ambiguous. At any point in time, market participants will already have used more or less rigorous valuation methods to judge their expected risk-adjusted value of […]
The securities markets provide an evolving consensus of the risk-adjusted value of particular securities. By understanding how the markets value securities, individual investors can chose more durable investment strategies Judging the potential usefulness of different investment strategies requires some understanding of what the public securities markets really do. This article discusses how the markets price […]
Snapshots in time – How investment securities are valued Every securities market transaction requires a buyer and seller with differing viewpoints. Markets can operate, because there are differences between investors in their assessments of the intrinsic value and risk of securities. Personal Financial Planning Software Current investment values vary in the eyes of the many […]
Do-It-Yourself Financial Planning – Understand your projected expenses over your lifetime Increased savings through conscious expenditure reduction is the largest and most controllable factor in long-term personal finance success. Anyone interested in improving personal financial planning must understand that tracking expenses accurately and comprehensively is very important. Exactly how your expenses are tracked is not […]
Do-It-Yourself Financial Planning – Earned income drives the personal finances of most people The ability to project your various income sources automatically over your lifetime is one of the first steps in creating a useful do-it-yourself personal financial plan. Whether from wages and salary or from self-employment, personal earned income drives the lifetime finances of […]
< <– Go to Part 4 The Biggest Personal Finance Story of the Past 30 Years – Conclusion Find Home Financial Planning Software This article concludes our series on the greatest personal finance story of the past thirty years. In this article, we discuss whether the dramatic growth in equity value of the financial services […]
< <– Go to Part 3 The Biggest Personal Finance Story of the Past 30 Years – Part 4 Financial Planning Software for Consumers What does it mean to individual investors that the financial services industry is now about 21% of S&P 500 market capitalization? (For a graph of the relative percentage shares of various […]
< <– Go to Part 2 The Biggest Personal Finance Story of the Past 30 Years – Part 3 Financial Planning Software for Consumers There is no reason to believe that industry self-regulation or governmental regulation will ever fix these problems. Only those individuals who become wise enough to be proactive and seek out lower […]
< — Go to Part 1 The Biggest Personal Finance Story of the Past 30 Years – Part 2 Discover Home Financial Planning Software To understand what has happened to the market valuation of the financial services sector, particularly over the last 30 years, you should view Figure 4 on page 16 of the financial […]