80 Additional Thoughts – Spring 2006."Race has long shaped shopping experiences for many Americans. 71 Part II: Managing the Total Portfolio Impact of Options. 70 Part I: Valuing Options on a Stand-Alone Basis. 70 Stock Options and Portfolio Management. 69 Chapter 5: Portfolio Impacts of Employee Stock Options. 68 Key Exercises and Questions for Chapter 4. 57 Summary Thoughts on Portfolio Allocation. 54 Allocation and Portfolio Risk, Return, and Beta. 51 Automatic Calculation of Risk-Return Parameters. 49 Key Exercises and Questions for Chapter 3. 29 Chapter 3: Basic Risk-Return Analysis. 21 Historical Levels of Market Volatility. 20 Getting to Know the Standard Deviation. 16 The First Step in Accounting for Uncertainty. 16 Key Issues in Investing for Future Income. 5 Chapter 1: Personal Portfolio Management. First, there are two primary versions of the software and second, the user interface has changed somewhat since the first writing. NOTE to users: some of the screenshots shown in this text will not match your version of the software for two reasons. In this edition of the text, I have the benefit of comments and questions from the growing community of people who use our portfolio planning software. Whether or not you use a portfolio management package, however, the financial concepts introduced in this book will help you to understand the key factors in portfolio management. These financial techniques, embedded in software, will show you your financial portfolio in ways that you have not considered previously and will enable you to make far better portfolio management decisions. The good news is that there are standard financial techniques that can dramatically assist individuals in portfolio management. Many (if not most) financial advisors still use fairly simplistic tools for portfolio planningĪnd have no way to estimate the optimal portfolio balance of risk and return to meet a client’s personal goals. If you ask people what ‘tools’ they use in their managing their personal portfolios, you are likely to get some fairly blank looks back, even if you are talking to people with substantial investments. For many people, these concepts will sound pretty abstract. Finally, portfolio management is an ongoing process of reviewing your plans and altering those plans as time goes on. The next stage is to look at how much you need to invest, how you allocate those investments to meet your goals with reasonable certainty, and how much uncertainty you are willing to bear. This means that portfolio management starts with looking at what you are investing for, and how far into the future you are looking. For a quick definition, I describe portfolio management as the process of planning and executing a portfolio of investments in order to generate a desired future income stream. In today’s world, the funds you have available for future income will be largely (if not wholly) determined by what you save and how you manage your total portfolio. In the old world of pension plans, your pension plan provider carried all the risks of being able to invest properly so as to fund a guaranteed future income to you. Most working adults will ultimately be responsible for making sure that their future non-wage income is sufficient to meet their needs. The reality of the current world of financial planning is that every adult should be somewhat conversant with concepts of portfolio management. Some people will think of mutual fund managers, while others will think of richly paneled conference rooms and wealthy individuals strategizing with their financial advisors. Preface When you hear the term ‘portfolio management,’ what do you think of? Chances are that the images that spring to mind depend greatly on your financial situation and your educational and professional background. nor Geoff Considine is a registered investment advisor. Substantial losses may result from investing in stock and neither Quantext nor Geoff Considine shall in any way be held liable for losses incurred by readers of the book and/or users of the software. This book and software deal with investment planning and stock portfolios. There is no warranty, implied or explicit, whatsoever. Reproduction or distribution of any of this book and/or the software without explicit permission from Quantext constitutes a violation of the Copyright.ĭisclaimer This book and the accompanying software are provided on an ‘as is’ basis. Q u a n t ex t, I n c.Ĭopyright Notice Except as cited to other sources, all of the material in this book and the accompanying software is the exclusive property of Quantext, Inc.
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