Portfolio Management Software
This tutorial written and reproduced with permission from Peter Ponzo Recently I was asked whether buying a stock for a few percent less would make much difference in your annual return and I said I didn’t think so because … Buy for less? What does that mean? I mean instead […]
This tutorial written and reproduced with permission from Peter Ponzo We’re attaching a personal “Utility” to the prospect of receiving $x, namely U(x). For example, we might choose the Utility Function U(x) = SQRT(x) so that we attach to a gain of $10,000 a “Utility” of SQRT(10,000) = 100 and […]
This tutorial written and reproduced with permission from Peter Ponzo One often attempts to find some optimal strategy by varying certain parameters. Perhaps the problem is to find the optimal allocation of assets between stocks and bonds, given the Mean and Volatility of each asset. Perhaps it’s to decide the […]
This tutorial written and reproduced with permission from Peter Ponzo Once upon a time, in 1952, Harry Markowitz introduced “Modern Portfolio Theory” and the “Mean-Variance optimization” and … Figure 1 Huh? You pick a “risk” which you’re comfortable with (they equate Risk = Standard Deviation), then vary your […]