Delta neutral is a term used to describe a portfolio of stocks or other securities that has no overall sensitivity to changes in the price of the underlying asset. The underlying asset can be anything, but is most commonly a stock or a commodity. A delta neutral portfolio has two characteristics: 1. The portfolio has … Read more
The real rate of return is the rate of return that is adjusted for inflation. In order to calculate the real rate of return, you need to know the nominal rate of return and the rate of inflation. The real rate of return is calculated by subtracting the rate of inflation from the nominal rate … Read more
Switching is the process of selling one investment and buying another. Investors may switch investments for a number of reasons, including a change in market conditions, a rebalancing of their portfolio, or to take advantage of a tax-loss. What is drift in a portfolio? In finance, drift refers to the tendency of a portfolio’s performance … Read more
The equity risk premium (ERP) is the excess return that an equity portfolio is expected to earn over a risk-free rate. The ERP is often used as a measure of the riskiness of equity investments. The equity risk premium can be decomposed into two parts: the market risk premium and the size premium. The market … Read more
Dynamic asset allocation is a portfolio management strategy that involves periodically adjusting the mix of assets in a portfolio in order to take advantage of changing market conditions. The aim is to generate higher returns than would be possible with a static asset allocation, while also reducing volatility. This strategy is often used by pension … Read more
Overweight can be good for your portfolio in two ways: 1) It can help you achieve your desired asset allocation. 2) It can increase your returns. Overweighting is when you allocate a greater percentage of your assets to a particular investment than what is represented in the index. For example, let’s say you have a … Read more
The Treynor-Black model is a portfolio management model that is used to determine the optimal mix of assets for a portfolio. The model takes into account the expected return of each asset, the volatility of each asset, and the correlation between each asset. The model is used to find the portfolio that has the highest … Read more
Keep Separate Accounts on the Same Page with Overlays What do you mean by overlays? Overlays are a type of investment strategy where a portfolio manager adds one or more investments to an existing portfolio in order to achieve a specific goal. For example, a portfolio manager may add an overlay to a portfolio in … Read more
You can create and manage a financial portfolio by diversifying your investments, monitoring your portfolio’s performance, and rebalancing your portfolio as needed.. How to Create and Manage a Financial Portfolio Which type of management is used for managing portfolios? In portfolio management, there are four main types of management styles that are used: aggressive, conservative, … Read more
An aggressive investment strategy is one that involves taking on a higher level of risk in order to achieve greater potential returns. This type of strategy is often used by investors who have a higher tolerance for risk and are looking for ways to maximize their returns. An aggressive investment strategy can involve investing in … Read more
