A recent article for the Portfolioist (Asset Allocation: An Alternative View) is a great example of Safe Investing Principles in action.
- 6 – Continually measure the performance of your plan or system; there is always something that can be improved
- 9 – Improving your results requires improving your system; tools alone will not improve your profits
To summarize, the author takes an example portfolio used in financial publications (specifically Money magazine), and investigates:
- 1) Whether you and I could make this type of portfolio on our own
- 2) Whether you and I could improve this type of portfolio, from a risk/return standpoint
Using standard mathematical techniques one can optimize a portfolio (such as the Money magazine portfolio), and produce an arguably “better” (will achieve greater return for the same risk) investment result.
So don’t just rely on the magazine’s to tell you how to invest. Take a look for yourself and come up with your own plan and your own conclusions.
Asset Allocation: An Alternative View
Geoff Considine | October 21, 2011
All of these articles have saved me a lot of heaadches.
This is the sort of information I’ve been in search of. Thanks for posting.
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