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Concentrated Portfolios – The Elephant in Your Portfolio

 

Managing a portfolio around a concentrated position(s) may be one of the most difficult concepts for investors.  A “concentrated position” is an investment holding that represents a disproportionate percentage of a portfolio. Investors who choose to ignore concentrated positions within their portfolios are taking unnecessary risks. Rarely does a concentrated position resolve itself. Instead, investors need to adopt a strategy to systematically alleviate this concentrated risk. Continue reading Concentrated Portfolios – The Elephant in Your Portfolio

Mutual Fund Share Classes

Guest Blog: Sandy Gallemore, Director and Vice President for Education, InvestEd Inc.

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2015-08-11-1A mutual fund is a pool of money from many shareholders that is invested in stocks, bonds, or other investment assets. In general, mutual funds may be identified as those that charge a sales fee (load funds) and those that do not charge a sales fee (no-load funds). Many of the load funds offer several classes of shares.

While each share class of a given mutual fund has the same investment policies and objectives and includes money in the same investments, the fees associated with each class likely will cause some difference in the performance results. When a fund offers several share classes, the investor is able to select the class that best suits that investor’s goals and time horizon. The main share classes are identified as Class A shares, Class B shares, and Class C shares. Continue reading Mutual Fund Share Classes

Security Valuation and Quantitative Analysis

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For many years, security valuation was viewed as an esoteric theory, mainly left to academicians. Investors did not clearly understand, nor have the computing power, to carry out the developing theory. Today, however, times have changed. MBA’s, who have had a steady diet of quantitative investment analysis, have stormed Wall Street. Sophisticated personal computers are now not only commonplace, but also essential to compete in a challenging world. The effect has been to elevate security valuation methods to an important new level in the day to day decision making process of both professional and individual investors.
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Effective Portfolio Management – Understanding Risk

One of the basic premises of investing is that investors attempt to maximize the returns from their investments.  In doing so, it is assumed that investors are risk averse, that is, given a choice between two assets of equal rate of return, an investor will select the asset with the lower level of risk.  Although this relationship does not imply that all investors are risk averse, it does mean that there is a positive relationship between expected return and expected risk.  So how do we define risk? Continue reading Effective Portfolio Management – Understanding Risk

The Cost of Investing

The cost of investing is a crucial component of overall portfolio performance. Informed investors must understand the impact of investment fees and expenses, since the cumulative impact of these fees and expenses can be substantial. This is especially true with an ever growing universe of investment options, and the various levels of account management services, all having their costs. So, while most investors regularly monitor investment holdings, investment costs must likewise be reviewed. Continue reading The Cost of Investing

IAM Investing Principles

 

Current market volatility requires investors to reaffirm goals, reassess investments and rebalance portfolios with the goal of sound, long-term portfolio management. By identifying risk characteristics, return goals and time horizon, investor’s are able to balance their portfolio to properly match asset allocations (cash, bonds, stocks, other) to reach these goals.

Continue reading IAM Investing Principles

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