This document discusses various investment strategies including asset allocation, market timing, and buy and hold approaches. It notes that diversification works well until major market downturns, when most asset classes tend to decline together. The document then discusses how options strategies can be used to generate income, hedge risk, diversify a portfolio, and lock in profits. It provides examples of how put options, covered calls, and selling cash-secured puts work. The document concludes by outlining the two-basket approach used by SMARToption - Basket I invests in equities hedged with long-term put options, while Basket II independently generates income by selling short-term puts and calls. Historical performance data is presented showing how SMART
This document discusses investing during bear markets and periods of volatility. It provides two hypothetical examples where investing $1 million halfway through a market decline and recovery resulted in better returns than trying to time the market bottom. Waiting until the market clearly rebounded also resulted in lower returns. The document advocates for long-term investing through downturns rather than trying to predict short-term market movements. History shows that while bear markets are painful, positive market years have outweighed negative years. A diversified "core and satellite" approach is presented as a prudent strategy for investors.
http://profitableinvestingtips.com/stock-investing/designing-an-investment-portfolio
Designing an Investment Portfolio
Designing an investment portfolio may be the most important thing you do in investing. There are tips and insights to make you money but over the long haul profitable investing hinges on hedging investment risk as well as picking winners. Here are a few insights into designing an investment portfolio.
Matching Portfolio Risk to the Investor
We have often noted that as an investor ages he or she will commonly want to move to dividend stocks instead of riskier investment. Business Insider gives an example of analyzing the portfolio of a retiree for risk.
What’s one trademark of a poorly designed investment portfolio? The answer is a portfolio whose risk character is incompatible with the risk character of its owner.
Frequently, these risk incompatibilities are camouflaged by a hot stock market. But when the market reverses and begins to fall like it has lately, the problems of investment portfolios with unsuitable risk levels becomes apparent.
Factors to consider are cost, diversification, risk, tax efficiency and long term performance. You may be invested in a fund that pays good returns but those returns are largely eaten up by fees and commissions. If you were invested heavily in big oil you lost heavily when the price of oil fell. Diversification across various market sectors is good. Tax free or tax advantaged investments are good if you are still in your earning years but less important as you retire. Risk and long term performance are closely related. As the author says when the market is hot all stocks look good but when it falls only strong companies hold their value. If you would like to sleep well at night load up on long term strong performers.
Unexpected Outcomes
Sometimes strategies for designing an investment portfolio do not work out as expected. The New York Times writes about investment strategies mean to lessen volatility and how they may not have worked as expected.
Investing 101 - A beginner's guide to investing and investment conceptsWealthminder
Everything (important) you need to know about investing and investment related concepts. We'll walk you through the basics of everything from a financial plan to different types of investment accounts and different types of investment assets.
This is the internal presentation we give to all new employees of Wealthminder. They thought we should share it with everyone.
investment strategies to grow your income. How much risk can you subject your investments to? How much can
you afford to lose in the near future? Remember that most forms of
investment have risk associated with them. Simply pick investment
instruments that match your risk tolerance.
Benjamin Graham was an influential American economist and investor who is considered the father of value investing. He wrote two influential books, Security Analysis and The Intelligent Investor. The Intelligent Investor teaches the distinction between investing and speculation, with investing focused on analyzing companies and protecting against losses, while speculation aims for extraordinary gains. It also covers topics like how to select stocks, dealing with market fluctuations, and the importance of a margin of safety. The book has been hugely influential on investors like Warren Buffett and remains one of the foundational texts on value investing.
Clueless about investments? They are not as hard as you think. This workshop was created to help participants understand the basics of the financial instruments that they can use to achieve their goals.
This document provides a lesson plan on investment management. It begins with stories to illustrate investment concepts and then defines key terms like investment, savings, gambling, arbitrage, and speculation. It distinguishes investment from speculation based on factors like risk, time horizon, and objectives. The document outlines different types of investors and investment objectives like yield, choice, capital appreciation. It also discusses motives for saving like precautionary, transactional, and speculative motives. Finally, it covers the investment process and factors that influence investment decisions.
Use credit union investment basics seminar 3 27 12mullarkea
This document discusses various investment strategies and basics. It recommends that the most important strategies are to (F) have a plan, take advantage of time, and maintain consistency in investing (all of the above). It emphasizes starting to save and invest as early as possible, even small regular amounts, to benefit from long-term compound growth. Maintaining consistent investments over many years allows earnings to compound, growing the most. The document also discusses different investment options like stocks, bonds, and mutual funds that can be used to build a diversified portfolio suited to individual goals and risk tolerance.
This document discusses investing during bear markets and periods of volatility. It provides two hypothetical examples where investing $1 million halfway through a market decline and recovery resulted in better returns than trying to time the market bottom. Waiting until the market clearly rebounded also resulted in lower returns. The document advocates for long-term investing through downturns rather than trying to predict short-term market movements. History shows that while bear markets are painful, positive market years have outweighed negative years. A diversified "core and satellite" approach is presented as a prudent strategy for investors.
http://profitableinvestingtips.com/stock-investing/designing-an-investment-portfolio
Designing an Investment Portfolio
Designing an investment portfolio may be the most important thing you do in investing. There are tips and insights to make you money but over the long haul profitable investing hinges on hedging investment risk as well as picking winners. Here are a few insights into designing an investment portfolio.
Matching Portfolio Risk to the Investor
We have often noted that as an investor ages he or she will commonly want to move to dividend stocks instead of riskier investment. Business Insider gives an example of analyzing the portfolio of a retiree for risk.
What’s one trademark of a poorly designed investment portfolio? The answer is a portfolio whose risk character is incompatible with the risk character of its owner.
Frequently, these risk incompatibilities are camouflaged by a hot stock market. But when the market reverses and begins to fall like it has lately, the problems of investment portfolios with unsuitable risk levels becomes apparent.
Factors to consider are cost, diversification, risk, tax efficiency and long term performance. You may be invested in a fund that pays good returns but those returns are largely eaten up by fees and commissions. If you were invested heavily in big oil you lost heavily when the price of oil fell. Diversification across various market sectors is good. Tax free or tax advantaged investments are good if you are still in your earning years but less important as you retire. Risk and long term performance are closely related. As the author says when the market is hot all stocks look good but when it falls only strong companies hold their value. If you would like to sleep well at night load up on long term strong performers.
Unexpected Outcomes
Sometimes strategies for designing an investment portfolio do not work out as expected. The New York Times writes about investment strategies mean to lessen volatility and how they may not have worked as expected.
Investing 101 - A beginner's guide to investing and investment conceptsWealthminder
Everything (important) you need to know about investing and investment related concepts. We'll walk you through the basics of everything from a financial plan to different types of investment accounts and different types of investment assets.
This is the internal presentation we give to all new employees of Wealthminder. They thought we should share it with everyone.
investment strategies to grow your income. How much risk can you subject your investments to? How much can
you afford to lose in the near future? Remember that most forms of
investment have risk associated with them. Simply pick investment
instruments that match your risk tolerance.
Benjamin Graham was an influential American economist and investor who is considered the father of value investing. He wrote two influential books, Security Analysis and The Intelligent Investor. The Intelligent Investor teaches the distinction between investing and speculation, with investing focused on analyzing companies and protecting against losses, while speculation aims for extraordinary gains. It also covers topics like how to select stocks, dealing with market fluctuations, and the importance of a margin of safety. The book has been hugely influential on investors like Warren Buffett and remains one of the foundational texts on value investing.
Clueless about investments? They are not as hard as you think. This workshop was created to help participants understand the basics of the financial instruments that they can use to achieve their goals.
This document provides a lesson plan on investment management. It begins with stories to illustrate investment concepts and then defines key terms like investment, savings, gambling, arbitrage, and speculation. It distinguishes investment from speculation based on factors like risk, time horizon, and objectives. The document outlines different types of investors and investment objectives like yield, choice, capital appreciation. It also discusses motives for saving like precautionary, transactional, and speculative motives. Finally, it covers the investment process and factors that influence investment decisions.
Use credit union investment basics seminar 3 27 12mullarkea
This document discusses various investment strategies and basics. It recommends that the most important strategies are to (F) have a plan, take advantage of time, and maintain consistency in investing (all of the above). It emphasizes starting to save and invest as early as possible, even small regular amounts, to benefit from long-term compound growth. Maintaining consistent investments over many years allows earnings to compound, growing the most. The document also discusses different investment options like stocks, bonds, and mutual funds that can be used to build a diversified portfolio suited to individual goals and risk tolerance.
The presentation tries to give an overview of why an individual (retail investor) should opt for investing in the financial markets through various vehicles for getting returns that can beat inflation and other asset classes. Reach out for getting more clarity or assistance regarding the same.
There are many investment options available for stock market and mutual fund investing, including purchasing and selling stocks, mutual funds, day trading, trading penny stocks, and bonds. Stocks allow individuals to own a small part of a company, while mutual funds provide ownership of multiple stocks and bonds in a single investment. Day trading and penny stocks are considered riskier options that involve quick buying and selling. Bonds represent loans to companies and agencies that provide fixed returns. The key is choosing the investment types that suit one's goals and risk tolerance.
Introduction to investing power point presentation 1.12.1.g1nadinesullivan
The document provides an introduction to investing, including key concepts like rates of return, risk, inflation, common investment tools (stocks, bonds, mutual funds, etc.), and tax-sheltered investments. It explains that the Rule of 72 allows investors to calculate how long it takes an investment to double based on its interest rate. It also emphasizes that higher potential returns generally come with higher risks and discusses strategies like diversification to reduce risk.
This document discusses various types of investments including stocks, bonds, mutual funds, commodities, and real estate. It explains that investing means putting money into assets with the goal of financial gain over time. The document also covers reasons to invest like protecting against inflation. Speculative investing can lead to economic bubbles and crashes when prices rise above real value. Overall the document provides an overview of common investment vehicles and factors to consider.
As you may be aware, life expectancy of individuals has increased; which brings with it rise in medical and living costs during old age. Therefore, it is imperative to make provision for expenses wisely. All of us want to maintain our standard of living during our old age as well, but to do so we need to actually start thinking and planning for our retirement right from the beginning of our career when we are young. This ppt aims to help you understand how you can identify and establish your financial goals.
This document discusses how investing can help achieve life goals like buying a house, saving for children's education, and a comfortable retirement. It notes that inflation reduces purchasing power over time, so investing wisely can help overcome inflation. The document recommends starting to invest early, as early investors will benefit more from compounding returns. It then introduces Family Solutions as a unique investment solution from Franklin Templeton Mutual Fund that can help plan for different life goals through a single investment plan.
http://www.profitableinvestingtips.com/stock-investing/diversify-your-investment-portfolio
Diversify Your Investment Portfolio
Diversification is a means of reducing risk and increasing opportunity in investing. The chances of having a stock in your portfolio rise significantly in price goes up when you have five well-chosen stocks instead of one. The chances of losing all of your investment capital also go down when you diversify your investment portfolio among several stocks in several market sectors. Likewise, if a part of your investments is in property, a part is in stocks, a part is in bonds, and a part is in offshore investments you can reduce risk and increase the opportunity for profits. When suggesting offshore investment opportunities we wrote about Three Good Offshore Investment Ideas, for example.
Diversify Your Investment Portfolio to Gain Variety and Opportunity
When you diversify your investment portfolio you invest in a variety of assets. Because the value of each investment does not go up or down in perfect harmony, diversification averages out risk, as well as gain. To the extent that one is looking to a big gainer, having more stocks, real estate, or other assets may serve to increase the odds of success. In their book A Random Walk Down Wall Street the authors note that the best return in stocks is often a basket of about forty small cap stocks. These stocks are priced low because of the risk inherent in small companies. However, if you diversify your investment portfolio with a large number of these stocks, you increase the chances of finding a huge winner which will negate the effects on the portfolio of a handful of losers.
This document discusses how to construct a diversified portfolio using simplified modern portfolio theory. It begins by explaining key concepts like asset classes, risk, return and how diversification can reduce risk through dilution and interference. It then outlines major asset classes like shares, property, fixed interest and cash. It explains how a portfolio constructed of multiple asset classes can achieve superior risk-adjusted returns compared to holding single assets. The document provides examples of how allocating among shares, property and bonds from different countries over time achieved better returns with less volatility than holding any one asset class. It emphasizes regularly rebalancing a portfolio to maintain the desired asset allocation. Overall, the document provides a concise overview of basic portfolio construction principles.
The document discusses various ways that people invest, including putting money into stocks, bonds, and mutual funds. It outlines reasons for investing such as financial goals, income, wealth, and retirement. Key aspects of investing covered include having a budget and savings plan, establishing investment goals, understanding returns, risks, and diversification. The document provides strategies for long-term investing like asset allocation, dollar cost averaging, and following golden rules of fundamentals.
Investment basics wayne lippman
Wayne Lippman has forty years of involvement in broad daylight bookkeeping incorporating a quarter century Price Waterhouse, where he served as an expense accomplice in the San Francisco and Oakland workplaces. He was already Managing Tax Partner of the Walnut Creek office of Price Waterhouse.
Wayne spends significant time in individual assessment getting ready for corporate officials and corporate duty anticipating firmly held organizations. He has huge involvement in investment opportunity arranging, exploration and trial credits and multi-state tax assessment. His industry experience incorporates the tax assessment of assembling, dispersion, development, high innovation, retail, benefit commercial enterprises, land organizations and endeavor reserves. Wayne is dynamic in expert associations and is a past administrator of the Taxation Committee of the California Society of Certified Public Accountants, East Bay Chapter. Wayne Lippman got a Bachelor of Arts degree in Economics from the University of California, Berkeley and a Master of Science degree in Taxation from Golden Gate University.
The article discusses an alternative approach to experiencing the costs of index reconstitution, called “Asset Classes,” which allow the fund manager broader leeway as to when to buy or sell, along with a broader range of holdings. This discussion begins in the section called “Decision Two: Indexing or Asset Class Investing?”
The Asset Class approach, also referred to by others as "Factor Investing," is based on what has become to be called “Evidence Based Investing” due to roots discussed in the linked "Factor Investing" article, that come from academic (peer reviewed and repeatable results) foundation that continues to this day.
My blog post discussing this article is scheduled to post 8 Feb 2017 http://wp.me/p2Oizj-Hh
This document defines and discusses key concepts related to investments including direct investing, investment analysis, portfolio management, and money markets. It defines direct investment as investing in controlling interests of foreign businesses. Investment analysis evaluates investments for profitability and risk, while portfolio management determines optimal investment mixes. The document also defines money markets as markets for short-term financial instruments like treasury bills, certificates of deposit, commercial paper, repurchase agreements, and corporate bonds. It explains that money markets are used for short-term borrowing and lending.
This document discusses the fundamentals of investment, including definitions, principles, asset types, and considerations. It defines investment as a monetary asset purchased to generate future income or appreciation. The 5 basic principles are to diversify investments, start early to benefit from compound interest, understand that higher risk means higher potential returns, maintain investments during market slumps, and buy low and sell high. Main asset types include fixed income securities, shares, unit investment trusts, mutual funds, and property. Key considerations for investment include objectives, life stage, funds availability, risk tolerance, investment horizon, taxes, performance, and diversification. It also introduces variable universal life insurance as a new alternative investment option.
Mr. A started a gaming business with investments from friends. They later converted it into a private company and saw further success. To fund expansion, the company approached regulators to launch an IPO and list on the stock exchange, allowing public investment through share purchases. This marks the company's transition to a public listed company, with regular disclosure of financial details and shared decision making with shareholders. The story demonstrates the process of a business obtaining capital through an IPO to list on the stock exchange and become publicly traded.
This document provides an overview of investments. It discusses what investment is, different types of investments like mutual funds and stocks, and how to start an investment portfolio. The key points are:
- Investment refers to purchasing financial assets or goods used for further production. Common types of investments include mutual funds, stocks, and bonds.
- Starting an investment portfolio is a multi-step process including setting goals, educating yourself, determining your risk tolerance, deciding how much to invest, opening an account, and making initial investments regularly.
- Understanding investment risk and return is important. Low risk investments like mutual funds and bonds are safer options for beginners. Stocks can provide higher returns but also higher risk.
The document discusses key concepts for investment analysis and project selection, including:
1) Projects should yield a return greater than the minimum hurdle rate, which is higher for riskier projects. Returns should consider cash flows, timing, and side effects.
2) The optimal financing mix minimizes the hurdle rate and matches the assets financed.
3) If not enough high-returning investments exist, excess cash should be returned to stockholders.
Investment strategies of famous investment gurusHarish Manchala
This document summarizes the investment strategies of several famous investors including Benjamin Graham, Peter Lynch, Warren Buffett, David Dreman, John Neff, Kenneth Fisher, Martin Zweig, Joel Greenblatt, Joseph Piotroski, and James O'Shaughnessy. It describes the key aspects of each of their strategies such as focusing on value, price/earnings ratios, earnings growth rates, contrarian approaches, and blending growth and value styles.
This document analyzes an investment portfolio over 14 weeks from January 30, 2009 to May 1, 2009. The portfolio was managed with the goal of preserving capital given the economic recession. Key points:
- The portfolio was diversified across stocks, mutual funds, bonds, bills and held some cash. Individual securities like GE, McDonald's and Family Dollar were chosen for their lower beta and defensive nature.
- The portfolio beta was approximately 0.3, much lower than the market beta of 1, indicating it would be less volatile.
- The portfolio largely preserved capital, declining only 3.07% while the market rose 7.18%. The low beta strategy helped meet the goal of capital preservation in the volatile
This 3 sentence document promotes WPS Office presentation software. It thanks people for watching WPS Office and says WPS Office can make creating presentations much more fun. It tags the official WPS Weibo account and Kingsoft account.
This document provides steps for live webcasting using mFuse and FMLE software. The steps are: 1) download and install mFuse and FMLE; 2) in mFuse, create a picture-in-picture view to show different video sources; 3) in FMLE, configure mFuse as the input, set encoding parameters, and streaming server parameters; 4) start the broadcast by clicking start in FMLE. The live stream can then be viewed at a specified URL.
The presentation tries to give an overview of why an individual (retail investor) should opt for investing in the financial markets through various vehicles for getting returns that can beat inflation and other asset classes. Reach out for getting more clarity or assistance regarding the same.
There are many investment options available for stock market and mutual fund investing, including purchasing and selling stocks, mutual funds, day trading, trading penny stocks, and bonds. Stocks allow individuals to own a small part of a company, while mutual funds provide ownership of multiple stocks and bonds in a single investment. Day trading and penny stocks are considered riskier options that involve quick buying and selling. Bonds represent loans to companies and agencies that provide fixed returns. The key is choosing the investment types that suit one's goals and risk tolerance.
Introduction to investing power point presentation 1.12.1.g1nadinesullivan
The document provides an introduction to investing, including key concepts like rates of return, risk, inflation, common investment tools (stocks, bonds, mutual funds, etc.), and tax-sheltered investments. It explains that the Rule of 72 allows investors to calculate how long it takes an investment to double based on its interest rate. It also emphasizes that higher potential returns generally come with higher risks and discusses strategies like diversification to reduce risk.
This document discusses various types of investments including stocks, bonds, mutual funds, commodities, and real estate. It explains that investing means putting money into assets with the goal of financial gain over time. The document also covers reasons to invest like protecting against inflation. Speculative investing can lead to economic bubbles and crashes when prices rise above real value. Overall the document provides an overview of common investment vehicles and factors to consider.
As you may be aware, life expectancy of individuals has increased; which brings with it rise in medical and living costs during old age. Therefore, it is imperative to make provision for expenses wisely. All of us want to maintain our standard of living during our old age as well, but to do so we need to actually start thinking and planning for our retirement right from the beginning of our career when we are young. This ppt aims to help you understand how you can identify and establish your financial goals.
This document discusses how investing can help achieve life goals like buying a house, saving for children's education, and a comfortable retirement. It notes that inflation reduces purchasing power over time, so investing wisely can help overcome inflation. The document recommends starting to invest early, as early investors will benefit more from compounding returns. It then introduces Family Solutions as a unique investment solution from Franklin Templeton Mutual Fund that can help plan for different life goals through a single investment plan.
http://www.profitableinvestingtips.com/stock-investing/diversify-your-investment-portfolio
Diversify Your Investment Portfolio
Diversification is a means of reducing risk and increasing opportunity in investing. The chances of having a stock in your portfolio rise significantly in price goes up when you have five well-chosen stocks instead of one. The chances of losing all of your investment capital also go down when you diversify your investment portfolio among several stocks in several market sectors. Likewise, if a part of your investments is in property, a part is in stocks, a part is in bonds, and a part is in offshore investments you can reduce risk and increase the opportunity for profits. When suggesting offshore investment opportunities we wrote about Three Good Offshore Investment Ideas, for example.
Diversify Your Investment Portfolio to Gain Variety and Opportunity
When you diversify your investment portfolio you invest in a variety of assets. Because the value of each investment does not go up or down in perfect harmony, diversification averages out risk, as well as gain. To the extent that one is looking to a big gainer, having more stocks, real estate, or other assets may serve to increase the odds of success. In their book A Random Walk Down Wall Street the authors note that the best return in stocks is often a basket of about forty small cap stocks. These stocks are priced low because of the risk inherent in small companies. However, if you diversify your investment portfolio with a large number of these stocks, you increase the chances of finding a huge winner which will negate the effects on the portfolio of a handful of losers.
This document discusses how to construct a diversified portfolio using simplified modern portfolio theory. It begins by explaining key concepts like asset classes, risk, return and how diversification can reduce risk through dilution and interference. It then outlines major asset classes like shares, property, fixed interest and cash. It explains how a portfolio constructed of multiple asset classes can achieve superior risk-adjusted returns compared to holding single assets. The document provides examples of how allocating among shares, property and bonds from different countries over time achieved better returns with less volatility than holding any one asset class. It emphasizes regularly rebalancing a portfolio to maintain the desired asset allocation. Overall, the document provides a concise overview of basic portfolio construction principles.
The document discusses various ways that people invest, including putting money into stocks, bonds, and mutual funds. It outlines reasons for investing such as financial goals, income, wealth, and retirement. Key aspects of investing covered include having a budget and savings plan, establishing investment goals, understanding returns, risks, and diversification. The document provides strategies for long-term investing like asset allocation, dollar cost averaging, and following golden rules of fundamentals.
Investment basics wayne lippman
Wayne Lippman has forty years of involvement in broad daylight bookkeeping incorporating a quarter century Price Waterhouse, where he served as an expense accomplice in the San Francisco and Oakland workplaces. He was already Managing Tax Partner of the Walnut Creek office of Price Waterhouse.
Wayne spends significant time in individual assessment getting ready for corporate officials and corporate duty anticipating firmly held organizations. He has huge involvement in investment opportunity arranging, exploration and trial credits and multi-state tax assessment. His industry experience incorporates the tax assessment of assembling, dispersion, development, high innovation, retail, benefit commercial enterprises, land organizations and endeavor reserves. Wayne is dynamic in expert associations and is a past administrator of the Taxation Committee of the California Society of Certified Public Accountants, East Bay Chapter. Wayne Lippman got a Bachelor of Arts degree in Economics from the University of California, Berkeley and a Master of Science degree in Taxation from Golden Gate University.
The article discusses an alternative approach to experiencing the costs of index reconstitution, called “Asset Classes,” which allow the fund manager broader leeway as to when to buy or sell, along with a broader range of holdings. This discussion begins in the section called “Decision Two: Indexing or Asset Class Investing?”
The Asset Class approach, also referred to by others as "Factor Investing," is based on what has become to be called “Evidence Based Investing” due to roots discussed in the linked "Factor Investing" article, that come from academic (peer reviewed and repeatable results) foundation that continues to this day.
My blog post discussing this article is scheduled to post 8 Feb 2017 http://wp.me/p2Oizj-Hh
This document defines and discusses key concepts related to investments including direct investing, investment analysis, portfolio management, and money markets. It defines direct investment as investing in controlling interests of foreign businesses. Investment analysis evaluates investments for profitability and risk, while portfolio management determines optimal investment mixes. The document also defines money markets as markets for short-term financial instruments like treasury bills, certificates of deposit, commercial paper, repurchase agreements, and corporate bonds. It explains that money markets are used for short-term borrowing and lending.
This document discusses the fundamentals of investment, including definitions, principles, asset types, and considerations. It defines investment as a monetary asset purchased to generate future income or appreciation. The 5 basic principles are to diversify investments, start early to benefit from compound interest, understand that higher risk means higher potential returns, maintain investments during market slumps, and buy low and sell high. Main asset types include fixed income securities, shares, unit investment trusts, mutual funds, and property. Key considerations for investment include objectives, life stage, funds availability, risk tolerance, investment horizon, taxes, performance, and diversification. It also introduces variable universal life insurance as a new alternative investment option.
Mr. A started a gaming business with investments from friends. They later converted it into a private company and saw further success. To fund expansion, the company approached regulators to launch an IPO and list on the stock exchange, allowing public investment through share purchases. This marks the company's transition to a public listed company, with regular disclosure of financial details and shared decision making with shareholders. The story demonstrates the process of a business obtaining capital through an IPO to list on the stock exchange and become publicly traded.
This document provides an overview of investments. It discusses what investment is, different types of investments like mutual funds and stocks, and how to start an investment portfolio. The key points are:
- Investment refers to purchasing financial assets or goods used for further production. Common types of investments include mutual funds, stocks, and bonds.
- Starting an investment portfolio is a multi-step process including setting goals, educating yourself, determining your risk tolerance, deciding how much to invest, opening an account, and making initial investments regularly.
- Understanding investment risk and return is important. Low risk investments like mutual funds and bonds are safer options for beginners. Stocks can provide higher returns but also higher risk.
The document discusses key concepts for investment analysis and project selection, including:
1) Projects should yield a return greater than the minimum hurdle rate, which is higher for riskier projects. Returns should consider cash flows, timing, and side effects.
2) The optimal financing mix minimizes the hurdle rate and matches the assets financed.
3) If not enough high-returning investments exist, excess cash should be returned to stockholders.
Investment strategies of famous investment gurusHarish Manchala
This document summarizes the investment strategies of several famous investors including Benjamin Graham, Peter Lynch, Warren Buffett, David Dreman, John Neff, Kenneth Fisher, Martin Zweig, Joel Greenblatt, Joseph Piotroski, and James O'Shaughnessy. It describes the key aspects of each of their strategies such as focusing on value, price/earnings ratios, earnings growth rates, contrarian approaches, and blending growth and value styles.
This document analyzes an investment portfolio over 14 weeks from January 30, 2009 to May 1, 2009. The portfolio was managed with the goal of preserving capital given the economic recession. Key points:
- The portfolio was diversified across stocks, mutual funds, bonds, bills and held some cash. Individual securities like GE, McDonald's and Family Dollar were chosen for their lower beta and defensive nature.
- The portfolio beta was approximately 0.3, much lower than the market beta of 1, indicating it would be less volatile.
- The portfolio largely preserved capital, declining only 3.07% while the market rose 7.18%. The low beta strategy helped meet the goal of capital preservation in the volatile
This 3 sentence document promotes WPS Office presentation software. It thanks people for watching WPS Office and says WPS Office can make creating presentations much more fun. It tags the official WPS Weibo account and Kingsoft account.
This document provides steps for live webcasting using mFuse and FMLE software. The steps are: 1) download and install mFuse and FMLE; 2) in mFuse, create a picture-in-picture view to show different video sources; 3) in FMLE, configure mFuse as the input, set encoding parameters, and streaming server parameters; 4) start the broadcast by clicking start in FMLE. The live stream can then be viewed at a specified URL.
El documento trata sobre la ingeniería estructural actual y futura. Describe los procesos de estructuración, análisis estructural, elaboración de planos y desafíos éticos. También analiza temas como modelos estructurales, cargas estáticas y dinámicas, simplificaciones de software, diseño de elementos, y la necesidad de actualizarse ante los avances tecnológicos.
The poem is a Valentine's Day message expressing affection for the recipient, praising their smile as unique and hoping to make them smile, with a request at the end asking if they will be the sender's Valentine. It compliments the recipient as perfect in the sender's eyes and offers their heart, even saying they would still like the recipient if they were disfigured, showing their devotion goes beyond physical attraction.
This document discusses how to demonstrate the financial value of green buildings. It reviews studies showing that green buildings can command higher rents and sales prices, and have lower risks. However, owners and lenders often do not recognize this value. The document proposes several strategies to address this, such as standardizing green building data and performance metrics to reduce perceived risks. It also notes opportunities for increasing the value of existing building retrofits through programs that finance upgrades or guarantee energy savings. The overall conclusion is that demonstrating the operational cost savings and risk reductions of green buildings through data can help owners and lenders recognize their higher market value.
El documento trata sobre un proyecto estructural. No proporciona más detalles sobre el alcance, objetivos o características del proyecto. El título solo menciona que se refiere a un proyecto estructural sin especificar de qué se trata.
Smart option for planning for retirement, now at bealelee.comDavid Lee
The document discusses various strategies for protecting and growing wealth using financial tools like options. It explains that options are contracts that give the buyer the right to buy or sell a specific investment at a specific price. It then outlines the three main ways the SMARToption strategy uses options: buying long-term put options for downside protection; selling short-term covered calls to generate income from owned assets; and selling short-term puts to generate income. The document provides examples of how put options and covered calls work and the potential outcomes.
Laporan ini membahas perancangan sistem informasi manajemen karyawan untuk Unit Muara Mart yang meliputi analisis sistem yang berjalan, analisis kebutuhan sistem, perancangan sistem berbasis database menggunakan Microsoft Access dan Borland Delphi sebagai alat bantu pembuatan program, serta implementasi program yang dirancang. Tujuan sistem ini adalah untuk menunjang proses pengelolaan data karyawan secara lebih terstruktur, sistematis dan akurat.
Procedimientos constructivos para puentes carreterosCESEIC
El documento describe diferentes procedimientos constructivos para la construcción de puentes carreteros. Explica cuatro grupos de procedimientos, incluyendo el uso de lanzadoras de trabes para puentes tradicionales, cimbras autodesplazables para puentes especiales, el doble voladizo y el empuje por incrementos. Resalta la importancia de considerar el proceso constructivo desde el diseño inicial del puente.
This document provides advice for post-recession investing. It recommends developing an investment policy statement to guide asset allocation and using low-cost index funds and ETFs. For returning to the market, it says either invest lump sum since market timing is ineffective or average in over time with a formalized written plan to avoid high trading costs and dollar cost averaging up. The key is to keep emotions out and get exposure to equities for long-term returns to beat inflation.
The document discusses principles of behavioral finance and long-term investing. It notes that investors tend to be overconfident and influenced by short-term gains. Successful long-term investing requires discipline, focusing on asset allocation and diversification, and ignoring short-term noise and market hype. The key is developing a personalized investment policy and sticking to a plan through different market conditions.
The document discusses various investment options including bonds, CDs, stocks, and mutual funds. It explains that people invest to earn money from their savings and promote economic growth. It also outlines the risks and returns associated with different investment types and advises diversifying investments to reduce risk.
The document provides an overview of market structures and investing. It discusses the four main types of market structure - perfect competition, monopolistic competition, oligopoly, and monopoly - and their key characteristics. It also covers various financial securities like bonds, CDs, stocks, and mutual funds; explains how the stock market works; and discusses important stock market indices and whether the current market is a bull or bear market.
Trend following uses technical analysis to identify trends in the market and invest accordingly. It aims to capitalize on market movements by getting in at the start of an uptrend and exiting at the reversal. This strategy performs better than traditional buy-and-hold approaches during bear markets since it cuts losses quickly. The document outlines how trend following identifies trends using indicators like moving averages, allows winners to run, and employs strict stop losses to manage risk.
Amit Kumar Gupta has over a decade of experience in investment analysis and portfolio management. He has worked as a business consultant for leading companies and currently acts as a fund manager. The presentation discusses different types of market players like entertainment seekers, casino players, and investors. It emphasizes the importance of saving before investing, understanding compounding, avoiding leverage and media reports, focusing on asset allocation, and creating one's own investment framework. The key message is that investing requires a long-term mindset and discipline.
This document discusses various investment options for money such as properties, gold, fixed deposits, mutual funds, and business. It also discusses investing in bitcoins, treasury bills, and the stock market. It provides definitions of terms related to stock markets like shares, capitalization, IPO, and compound interest. It explains the power of compound interest over time. It also summarizes the history of stock markets in India, important stock exchanges, market indices, and how to invest in stocks. Overall, the document is an introduction to investing money in different assets classes with a focus on stock markets.
If you have watched the stock market for long period of time, you realize that it can be very unpredictable. One day bubbles flourish, things could get any better and then the next day it seem like the sky is falling.
Invesco's philosophy guides how they manage investments, provide choices, and connect with clients. They search globally for investment opportunities and follow disciplined processes. Their wide range of investment strategies and vehicles allows clients to create customized portfolios. They are committed to providing expert insights and high-quality support to help investors make informed decisions. Invesco has a strong legacy of investment management dating back to the 1940s, with over $779 billion in assets under management across 20 countries.
Investment refers to allocating money or resources with the expectation of future income or profit. There are various sources of investment like stocks, mutual funds, bank deposits, cryptocurrency, real estate, and bonds. Stocks represent ownership in a company and stockholders are entitled to a portion of company profits. Mutual funds pool money from investors to purchase a diversified portfolio managed by professionals. Investing in mutual funds provides advantages like diversification, professional management, and liquidity compared to individual stocks.
This document discusses how individual retirement accounts (IRAs) can be used as versatile financial tools to accomplish savings goals. It notes that IRAs allow saving for retirement, reducing current or future taxes depending on the type of IRA (traditional or Roth), and passing wealth to future generations. The document also mentions that IRAs can be used to save for a child's future if they have earned income through work.
Investing involves seeking value and returns over the long term, not speculating for short term gains. Speculation involves investing in something without understanding it based on tips, while investing requires research and patience. With compounding over time, even small investments can grow significantly. Proper financial planning includes setting goals, asset allocation, and managing risk to meet objectives over different life stages.
1) The document discusses investment strategies for advisors in today's challenging market landscape characterized by a secular stock bear market, inflation threats, and low bond returns.
2) It introduces Emerald's alternative asset allocation approaches across three strategies - Hybrid, Concentrated Equity, and Global Cycle - that aim to preserve capital, provide growth, and avoid style-box thinking.
3) The strategies utilize various mutual funds and investment styles, including hedged funds, theme-based funds, and short positions, to capture upside while limiting downside in different market environments over timeframes of 3+ years.
This document discusses various types of investors and behavioral finance theories. It describes savers, speculators, bull investors, bear investors, and specialists. It then explains prospect theory, regret theory, anchoring, and over-and-under reaction. Prospect theory shows how people assess risk differently based on potential gains or losses. Regret theory discusses avoiding regret when investments decline. Anchoring refers to relying on recent prices. Over-and-under reaction means overestimating success and underestimating risks. The document provides examples for each theory.
(1) Investment is committing money for a period of time to earn future payments that compensate for the time committed, expected inflation, and uncertainty. (2) Investors can be individuals, governments, pension funds, or corporations. (3) Types of investments include stocks, bonds, real estate, precious metals, commodities, and art. The stock market refers to exchanges where public company shares are traded.
Trends in the Stock Market - It's a Money ThingTim McAlpine
It’s a Money Thing is a collection of effective and affordable financial education content designed to engage and teach young adults while setting your credit union apart. These presentations and other elements are all customizable with your credit union's logo. Check out Currency Marketing at currencymarketing.ca/money-thing for more information.
Stanford CS 007-07: Personal Finance for Engineers / Good Investing is BoringAdam Nash
These are the slides from the 7th session of the Stanford University class, CS 007 "Personal Finance for Engineers" given on November 7, 2017. This seminar covers compounding, types of investments, diversification, how to invest, and the four keys to good investing (all boring).
Stanford CS 007-07 (2018): Personal Finance for Engineers / InvestingAdam Nash
These are the slides from the 7th session of the Stanford University class, CS 007 "Personal Finance for Engineers" given on November 6, 2018. This seminar covers compounding, types of investments, diversification, how to invest, and the four keys to good investing (all boring).
University of North Carolina at Charlotte degree offer diploma Transcripttscdzuip
办理美国UNCC毕业证书制作北卡大学夏洛特分校假文凭定制Q微168899991做UNCC留信网教留服认证海牙认证改UNCC成绩单GPA做UNCC假学位证假文凭高仿毕业证GRE代考如何申请北卡罗莱纳大学夏洛特分校University of North Carolina at Charlotte degree offer diploma Transcript
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Madhya Pradesh, the "Heart of India," boasts a rich tapestry of culture and heritage, from ancient dynasties to modern developments. Explore its land records, historical landmarks, and vibrant traditions. From agricultural expanses to urban growth, Madhya Pradesh offers a unique blend of the ancient and modern.
13 Jun 24 ILC Retirement Income Summit - slides.pptxILC- UK
ILC's Retirement Income Summit was hosted by M&G and supported by Canada Life. The event brought together key policymakers, influencers and experts to help identify policy priorities for the next Government and ensure more of us have access to a decent income in retirement.
Contributors included:
Jo Blanden, Professor in Economics, University of Surrey
Clive Bolton, CEO, Life Insurance M&G Plc
Jim Boyd, CEO, Equity Release Council
Molly Broome, Economist, Resolution Foundation
Nida Broughton, Co-Director of Economic Policy, Behavioural Insights Team
Jonathan Cribb, Associate Director and Head of Retirement, Savings, and Ageing, Institute for Fiscal Studies
Joanna Elson CBE, Chief Executive Officer, Independent Age
Tom Evans, Managing Director of Retirement, Canada Life
Steve Groves, Chair, Key Retirement Group
Tish Hanifan, Founder and Joint Chair of the Society of Later life Advisers
Sue Lewis, ILC Trustee
Siobhan Lough, Senior Consultant, Hymans Robertson
Mick McAteer, Co-Director, The Financial Inclusion Centre
Stuart McDonald MBE, Head of Longevity and Democratic Insights, LCP
Anusha Mittal, Managing Director, Individual Life and Pensions, M&G Life
Shelley Morris, Senior Project Manager, Living Pension, Living Wage Foundation
Sarah O'Grady, Journalist
Will Sherlock, Head of External Relations, M&G Plc
Daniela Silcock, Head of Policy Research, Pensions Policy Institute
David Sinclair, Chief Executive, ILC
Jordi Skilbeck, Senior Policy Advisor, Pensions and Lifetime Savings Association
Rt Hon Sir Stephen Timms, former Chair, Work & Pensions Committee
Nigel Waterson, ILC Trustee
Jackie Wells, Strategy and Policy Consultant, ILC Strategic Advisory Board
KYC Compliance: A Cornerstone of Global Crypto Regulatory FrameworksAny kyc Account
This presentation explores the pivotal role of KYC compliance in shaping and enforcing global regulations within the dynamic landscape of cryptocurrencies. Dive into the intricate connection between KYC practices and the evolving legal frameworks governing the crypto industry.
How to Invest in Cryptocurrency for Beginners: A Complete GuideDaniel
Cryptocurrency is digital money that operates independently of a central authority, utilizing cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies are decentralized and typically operate on a technology called blockchain. Each cryptocurrency transaction is recorded on a public ledger, ensuring transparency and security.
Cryptocurrencies can be used for various purposes, including online purchases, investment opportunities, and as a means of transferring value globally without the need for intermediaries like banks.
2. Where do you think 17 Years
we‟re headed?
History Shows that the market typically
moves in cycles. In the past 105 years, there 17 Years
11 Years
have been three bull markets and three bear
markets. The chart shows that we may have
entered a bear market.
25 Years
5 Years
Bull
18 Years
Bear
1906-1924 1925- 1930-1954 1955-1965 1966-1982 1983-1999 2000-?
1929
Value of the Dow Jones Industrial Average for 105 Years (1906-2011)
3. What do investors want?
Not to lose money
Hope to get or stay rich
Banish fear of being poor
Leave money to kids and or spend money
in retirement
4. How will you get there?
Adding new managers that
will enhance your current
mix of investments and
supplement them during an
economic cycle when
traditional investments do
not work.
5. How will you get there?
Typically, investors have used
three strategies to get there:
1. Asset allocation
2. Market timing
3. Buy and hold
6. Diversification works…
Asset Class Examples Using Vanguard Mutual Funds
Timeline goes from top of the Tech Bubble through the bear market of
2000-2002 and recovery to the peak in October 2007
S&P500
Pacific Index
REIT Index
Small Cap
Total Bond Index
European Index
Emerging Markets
7. until it doesn‟t…
Asset Class Examples Using Vanguard Mutual Funds
After October 2007, equities marched in relative unison.
Bonds offered the only significant diversification.
SMARToption
S&P500
Pacific Index
REIT Index
Small Cap
Total Bond Index
European Index
Emerging Markets
8. Find Non-Correlated Assets
Correlation Sphere
Traditional
investment assets
correlate to “1” in
this area
Hedged Equity
9. Market timing
• The idea is to move money to
bonds and cash when the market
is going to go down
OR
• Tactically move between asset
classes during different cycles in
the economy
• Timing the market involves calling
it right twice, not just once, and
that's nearly impossible
10. Market timing
• Most investors tend to let the competing
emotions of fear and greed dictate their
investment decisions
• This leads to the tendency to invest after a
significant increase in prices and sell during
down periods, the opposite of buying low and
selling high.
11. Market timing
• This phenomenon has been widely
documented, included in a 2003 Dalbar
Study*
• It shows that the average investor
stayed invested in equity funds for less
than 3 years, buying when stocks went
up and selling when the going got tough
*2003 Dalbar, Inc., “Quantitative Analysis of Investment Behavior”.
12. Market timing
The end result was that investors earned an
average of 2.57% from 1984 to 2003, a
hair below inflation of 3.14%, and far short
of the 12.2% annual gain on the S&P 500
for the same period
13. Market timing
The record on professionals timing the market is just as
abysmal.
• The Hulbert Financial Digest* has tracked what would have
happened if every year an investor put his money into the
prior year‟s top performing market timing newsletter.
• Over 21 years the result would have been an annualized
loss of 31.4 percent a year.
• In the real world, that‟s equivalent to investing $10,000 in
January 1981 and finding that all you have left at the end of
2002 is $2.32.
*Mark Hulbert, Hulbert Financial Digest, http://www.fundadvice.com/FEhtml/PsychHurdles/0304b.html
15. Buy and Hold Investors
American Airlines $36.13 $37.05
1980 to January 12, 2012 $20.87
$13.62
$8
$2.34
$4.44
$0.32
16. Buy and Hold Investors
1996
Eastman Kodak 1987
$80
1962 to January 12, 2012 $68
1972
$66
2009
$2.96
1/2012
$0.52
17. Buy and Hold Investors
Microsoft
2000 to January 12, 2012
April 3, 2000
$32.53 January 23, 2012
$25.70
18. Buy and Hold Investors
If you bought and held a 60/40 If you bought the S&P 500
portfolio* in 2000 and held it through
(stocks/bonds), what it would 2011
have done…
OR You would be about even
e.g. 2008
30%
*Lipper Diversified Growth and Income Index
19. Are there other financial
tools I can use to protect
and grow wealth?
20. How to Collar a Black Swan
THE STRIKING PRICE | SATURDAY, JANUARY 8, 2011
By STEVEN M. SEARS
Using options to manage the risk of a downturn
may be a good idea.
“…pension funds and other institutional
investors …can no longer rely solely on
macro-economic analysis to adjust portfolios.
They have to be cognizant of tail risk and risk
management on an ongoing basis. The idea
of tail risk, essentially that the unexpected will
happen from time to time, is one of the key
traits of the modern stock market”.
21. What are other Institutional
investors saying?
Joann Hill, ProShares Head of Investment Strategies
(2010 IMN Superbowl of Indexing keynote presentation).
“alternative strategies that include options add value to a
portfolio and outperform traditional strategies in risk
reduction”
James E. Keohane, Healthcare of Ontario Pension Plan Senior Vice-
President (2010 IMN Superbowl of Indexing presentation).
“portfolio managers that do not use options can not
adequately protect against market risk”.
23. Options are:
Contracts to either BUY or SELL a specific
investment at a specific price
The purchase price of an option is called the
PREMIUM – you pay for
this if you exercise your
option or not.
24. Options:
The contracts establish a specific price called the
STRIKE PRICE at which the contract may be
exercised
OPTIONS have a shelf life –
Also called an expiration date,
which is the latest date you can
“exercise” you option or close out your position
26. CALL = Buy
The purchase of a call option gives the owner the
right but not the obligation to BUY 100 shares of the
underlying security at the STRIKE price on or before
the expiration date.
The buyer has the right but not the obligation
to BUY the shares.
The seller of the option does have the obligation
to sell the shares to the buyer.
27. PUT = Sell
Conversely, the purchase of a put option
gives the owner the right but not the
obligation to SELL 100 shares of the
underlying security at the STRIKE
price at anytime before the expiration
date.
In this case the seller of the put is required to
buy the security at the strike price at the
buyer‟s request.
28. Buyers of options
Including both puts and calls spend money.
They pay the premium.
Seller of options
Including both puts and calls collect money.
They collect the premium.
30. PUT Options
Put options are usually purchased as protection
against falling stock prices. You pay the premium
upfront so that if the underlying stock falls below
the strike price, your potential loss is limited.
This protective put works like an insurance policy.
31. PUT Options
If you buy a put option on the S&P 500 (SPY):
You pay some money upfront, and you have the right to sell SPY
at a certain price, no matter how much SPY declines. If SPY goes
below your strike price, the value of you put will increase. The
more the SPY falls, the higher your put will be worth.
You can sell the put for a profit anytime before the expiration date.
If the SPY stays above the strike price, you still can sell the put
anytime before the expiration date, but for less than what you paid.
32. The Covered Call
A strategy in which an investor sells or “writes” a call option
contract while at the same time owning an equivalent
number of shares of the underlying stock or index fund, like
SPY.
The stock or index fund is generally held in the same
brokerage account from which the investor writes the
call, and fully collateralizes, or "covers," the obligation
conveyed by writing a call option contract.
This strategy is the most basic and most widely used
strategy combining the flexibility of listed options with stock
ownership.
33. The Covered Call
• If you sell a covered call on the SPY, you collect
some money upfront, and you have the obligation
to deliver your shares of SPY if it hits the strike
price.
• If SPY stays below the strike price, you get to keep
the premium you collected.
• If SPY approaches the strike price, instead of
waiting for your shares of SPY to be “called away”
you can buy the calls back and close the position.
34. PUT Options
If you sell a put option on the SPY:
You collect the premium immediately adding cash to you
account, and you have the obligation to buy shares of SPY if
it hits the strike price.
If SPY stays above the strike price, you get to keep the
premium you collected
If SPY approaches the strike price, instead of being forced to
buy SPY at that price, you can buy the puts back and close
out the position.
36. Are options risky?
Not any more risky than buying a
stock is risky.
It‟s the investment strategy that can
significantly lower risks, not the options
themselves.
When correctly applied and actively
managed they can be tailored for specific
purposes and market conditions.
37. Are options risky?
When incorrectly applied or left
unmanaged, these strategies can expose
investors to unacceptable losses.
In the past when these strategies failed, they
made headlines in the news.
Options ended up with the blame
instead of the investment strategy.
38. The Options Clearing
Corporation (OCC)
► OCC is a participant in every options
transaction, serving as the intermediary between
buyers and sellers.
► You do not deal with any person on the other side
of the transaction, you are dealing with the OCC
► OCC issues, guarantees and clears all option trades
placed on the U.S. options exchanges.
► Ensures that all of the rules involved in the sales
transactions will be followed and that each side will
perform as promised.
39. The use of exchange-listed
options has been growing
at a phenomenal rate.
500%
In the last ten years trading
volume has increased by
nearly 500%, with more than
3.8 billion contracts traded in
2010.*
*2010 Options Industry Council Benchmark Study
40. Why should you have options
in your portfolio?
1.Generate income
2.Hedging
3.Diversification
4.Locking in profits
42. How SMARToption works
Hedged Equity Strategy
+
Proprietary Monthly
Trading Strategy
A two-pronged approach that
mathematically minimizes large losses in
your portfolio
43. SMARToption
Basket I Basket II
Equity + Hedge/Downside
Monthly Options Trading
Protection
44. Basket I
Consists of:
• S&P 500 exchange traded fund
• a put option to minimize risk
The option portion of Basket I is specifically designed to limit a portfolio‟s
exposure to falling markets. The option component is an investment
similar to an insurance policy on your house. The deductible for this
policy (amount you pay for protection) is specifically chosen to limit (not
eliminate) losses.
If Market is Put is
45. Basket I
100% of client money
Hedge / Downside
Equity Protection
(85-90% of client money) (10-15% of client money)
S&P 500 Exchange Traded Fund Long Put Option: Bought at or near
SPY the money – sized to give you
defined risk of 7-10% maximum downside.
46. Basket I
By investing in a broad-based index fund such as SPY, it
automatically reduces company/ sector risk through
diversification across multiple companies and even markets
(e.g.US/International).
Buying and holding the index ETF also eliminates futile
attempts in market timing and/or predicting future values of
individual stocks.
This strategy is possible because protection from significant
declines does not come from prophesy but from the Basket I
hedge.
47. Basket II
We sell out of the money
Puts and Calls against our positions in
Basket I
(Brings cash into the account)
1. Sell Put on SPY 2. Sell Call on SPY
48. Basket II
When puts and calls are sold, they generate
premium or „income‟ that is added to your account.
This independent income generating component of
the strategy generates income to the account in all
market conditions.
49. Basket II
This income also helps to offset the cost of the hedge used
in Basket I. It incorporates multiple specified adjustment and
liquidation points to minimize risk and maximize the
frequency and size of monthly returns.
These adjustment and liquidation points were extensively
back-tested and then proven through implementation over
the past 14 years.
Basket II has been quantitatively designed in type, size, &
frequency to provide market-neutral returns.
50. Basket II – Selling out of the money
Puts and Calls against our positions in Basket I
1. Sell a put
2. Sell a call
Sweet spot over the
If the market moves down market. Take profits on If the market moves up
toward put strike, we have both the put and call if toward call strike, we
a stop order to buy back market remains within have a stop order to
the put here sweet spot buy back the call here
Put in the $ Call in the $
1. Put strike S&P 500 current 2. Call strike
price market price price
51. Basket II
Adjustments
If the market moves
If the market moves down down toward put
toward put strike, we have strike, we will take
adjustment points that Sweet spot over the profits on the original
enable us to stay in the market moves with call and sell a new
trade and increase the the market call which brings in
probability of success to more premium
over 80%
Original Put New Call Original Call
S&P 500 S&P 500 closed for
strike price
new price original price profit
52. SMARToption‟s – 2 components
Basket I - 100% of a client‟s portfolio is invested in Basket I. 85-90% is
invested in SPY equity shares and 10-15% is invested in a hedge through a
long-term option on SPY.
53. Basket II is an independent income generating component
of the strategy which has been quantitatively designed in
type, size, & frequency to provide market-neutral returns.*
*Based on past performance
55. The Key to SMARToption‟s Success
Upside
Capture has 100%
averaged 70% of Bear
the S&P 500 70%
returns in bull
markets
-5%
Downside Capture
has averaged 5% of the Bull
S&P 500 returns in bear
markets
-100%
56. SMARToption captures substantial
upside in bull markets
Market Cycles
and minimizes losses SMARToption vs S&P 500*
in bear markets!
SMARToption* S&P 500
Bull 1 49.23% 71.17%
Bear 1 24.41% -37.61%
Bull 2 53.61% 82.85%
Bear 2 -3.60% -37.00%
Bull 3 44.50% 48.97%
*Since inception, 1997, gross of fees
Important Notes: All investments involve the risk of potential investment losses as well as the potential for investment gains. Prior performance is no guarantee of future results and there can be
no assurance, and clients should not assume, that future performance will be comparable to past performance.
57. Cumulative Value vs. Market
Bull and Bear Market
Cumulative Values
SMARToption* S&P 500 SMARToption vs S&P 500*
Bull 1 $149,232 $171,169
Bear 1 $185,660 $106,792
Bull 2 $285,192 $195,269
Bear 2 $274,925 $123,019
Bull 3 $397,156 $183,254
*Since inception, 1997, gross of fees
Important Notes: All investments involve the risk of potential investment losses as well as the potential for investment gains. Prior performance is no guarantee of future results and there can be
no assurance, and clients should not assume, that future performance will be comparable to past performance.
58. The Key to SMARToption‟s Success
Prevent large losses! Down Years for the S&P 500*
From 2000-
12.97%
2002, hedging 12.22%
protected the 8.42%
downside and
-3.6%
actually provided a
profit! -9.10%
-11.89%
In 2008, when S&P
500 lost 37%, we -22.10%
were down only
3.6% before fees!
-37.00%
*Since inception, 1997, gross of fees
Important Notes: All investments involve the risk of potential investment losses as well as the potential for investment gains. Prior performance is no guarantee of future results and there can be
no assurance, and clients should not assume, that future performance will be comparable to past performance.
59. Reduces Risk
Increases Returns Risk vs. Return
1997- 2011
Annualized Return
Risk – Standard Deviation
Important Notes: All investments involve the risk of potential investment losses as well as the potential for investment gains. Prior performance is no guarantee of future results and there can be
no assurance, and clients should not assume, that future performance will be comparable to past performance.
60. Client in SMARToption
since 1997 *Net of fees
Aggregate Growth vs. Indices*
4.5
1997 – 2011
4.0
3.5 SMARToption
3.0 S&P 500
2.5
2.0
1.5
1.0
12/97 12/99 12/01 12/03 12/05 12/07 12/09
Important Notes: All investments involve the risk of potential investment losses as well as the potential for investment gains. Prior performance is no guarantee of future results and there can be
no assurance, and clients should not assume, that future performance will be comparable to past performance.
61. Take the Good with the bad
If you are in the market and not
hedged when the market drops
40%, it’s a lifestyle change!
62. Client in SMARToption
since 2003
Aggregate Growth vs. Indices* *Net of fees
2003 – 2011
2.6
2.4
SMARToption
2.2
S&P 500
2.0
1.8
1.6
1.4
1.2
1.0
1/04 1/05 1/06 1/07 1/08 1/09 1/10 1/11
Important Notes: All investments involve the risk of potential investment losses as well as the potential for investment gains. Prior performance is no guarantee of future results and there can be
no assurance, and clients should not assume, that future performance will be comparable to past performance.
63. The proof is in the performance
SMARToption vs S&P 500
Cumulative Returns 1997 – 2011
SMARToption (Gross of Fees)
S&P 500
297%
83%
Important Notes: All investments involve the risk of potential investment losses as well as the potential for investment gains. Prior performance is no guarantee of future results and there can be
no assurance, and clients should not assume, that future performance will be comparable to past performance.
64. The proof is in the performance
Growth of $100,000
Cumulative Returns 1997 – 2011
SMARToption (Gross of Fees)
S&P 500
$397,156
$183,254
Important Notes: All investments involve the risk of potential investment losses as well as the potential for investment gains. Prior performance is no guarantee of future results and there can be
no assurance, and clients should not assume, that future performance will be comparable to past performance.
66. Are a big deal!
In the past, investors had great difficulty obtaining meaningful
comparisons of accurate investment performance data.
Making apples-to-apples comparisons of investment
performance was problematic,
and the existence of country-specific
guidelines for performance presentation
further complicated matters.
67. Are a big deal!
There was a need for a practitioner-driven set of ethical
principles and a standardized, industry-wide approach to
calculating and reporting investment results.
The foundation for the GIPS standards
was first established in 1987.
To develop one globally accepted
set of standards, the GIPS
committee began work in 1995 to get
them formally endorsed
68. Are a big deal!
After an extensive period of public comment, the AIMR Board
of Governors (now known as the CFA Institute) formally
endorsed the GIPS standards in February 1999.
Since their introduction, the GIPS standards have gathered
momentum with investment management firms worldwide
adopting these voluntary, ethical standards for calculating
and presenting historical investment performance.
Organizations in 34 countries sponsor and promote the
standards.
69. Are a big deal!
• GIPS compliant firms voluntarily go beyond legal reporting
requirements to demonstrate a commitment to open,
honest, and ethical practices.
• To claim compliance, an investment firm must demonstrate
adherence to comprehensive and rigorous rules governing
input data, calculation methodology, composite
construction, disclosures, and presentation and reporting.
• GIPS compliant firms must have their data audited and
verified by a qualified third party firm.
70. Are a big deal!
Investments that adhere to GIPS® should assure
investors that the firms’ investment performance
is complete and fairly presented.
72. Fees
SMARToption will have a SET FEE SCHEDULE!
Fees will be deducted quarterly for a total of 2.25% annually.
The FEE SCHEDULE is not-negotiable and cannot be altered.
You will not see any other fees taken out of your account
NO transaction fees
NO ticket charges
NO trading costs
How can we do this?
73. Wrap fee structure
A wrap fee structure is where both:
● Asset management fees for advisory services
● Transaction fees for execution services
are wrapped into a single fee charged to the client.
In a Wrap Fee arrangement, a client’s costs are the
same regardless of the number of transactions in an
account.
74. Total Expense Structure
The underlying vehicle is an S&P 500
ETF, which has a very low expense ratio of
0.0945%.
TOTAL ANNUAL FEE: 2.25% + 0.0945 = 2.3445%
76. It‟s all about transparency
► With fee-based money management you
know what you are paying for upfront.
► Your advisor’s interest is in-line with yours.
The better your investments performs the
higher the fee they will receive.
► When compared to other fee structures for
comparable products, this fee schedule is
quite reasonable.
77. Expense Ratios
► According to the Investment Company Institute (ICI) the average
expense ratio for a mutual fund that is actively managed is 1.45%.
► This includes fees paid to the manager of the fund, administrative
costs, marketing and distribution services.
► The expense ratio is not deducted from your account, rather the
investment return you receive is already net of the fees.
► Plus on top of that you will also pay your advisor a fee. Typically
1%-2%.
► Assuming 1.5% (advisory fee) + 1.45% (average expense ratio
mutual fund) this brings the total cost of owning a mutual fund to
about 3.0%, not to mention trading and transaction fees that may
apply!
78. This Putnam Fund has an expense ratio of
1.58%
+ 1.50% Management fee + Other transaction costs $$$
79. Liquidity
► The underlying holdings in the account consist of an
ETF (SPY) and options (puts and calls), all of which
are highly-traded, marketable securities.
Therefore, the strategy is 100% liquid at all times as
we could simply sell these securities if needed at any
time.
► To optimize the strategy, we would strongly
discourage you from taking funds out of the
SMARToption Model, so that you can receive the full
benefit of the model‟s performance.
80. Liquidity
► SMARToption is positioned as the core “growth”
strategy and so short-term liquidity should be
addressed elsewhere in your financial plan.
82. Technology Advantage
One of the most sophisticated and highest performing
strategies in the industry, SMARToption requires advanced
technology to be able to implement across thousands of
accounts.
► We have developed a proprietary electronic system which
facilitates implementation, monitoring, and adjustment of the
strategy.
►By specifically designing our interface consistent with our
strategy, we have dramatically simplified implementation and
management activities such as trading, new account
investment, reporting, etc.
83. Operations
Trading Systems
● Broker-Specific Trading and Order Management Systems
● Proprietary/Custom Trader Software
Monitoring/Coverage
● Continuous oversight /monitoring during trading hours
● Multiple traders monitoring positions and executions (redundancy)
● Automated email/phone notifications on market price, adjustment &
liquidation points
Back Office/Reporting
● Captools (GIPS® Compliant) performance software
89. SMARToption‟s
Recognition and Awards
PSN TOP Gun
3 Years
(among the top 10 performers in its peer group of
several thousand large cap money managers as
maintained by Informa Investment Solutions)
90. SMARToption‟s
Recognition and Awards
GIPS® compliant (verified through end of 2010)
demonstrated returns over 14 years.
In bull, bear and flat market conditions
One strategy made up of two components or “Baskets” as we call them
We sell short term options against our positions in Basket I. Short term to maximize the speed at which the options value drops. Price decay is quickest as options get near their expiration date. Our goal is to generate ½% per month or more. Probability based strategy. Profitable 66-80% of the time.
This is a rules based strategy. It is tightly managed to take profits and prevent large losses. Options are never held to expiration and our rules (contingent orders are placed when initial trade occurs) never allow a put or call to go “in the money” We have managed this way for over 14 years. We have managed through many wild gyrating markets. Basket II enables us to balance our portfolio, keep it market neutral and has earned approximately half of our returns over the years.
Our rules call for adjustments in the trade at specific points on the price line. We will take profits on one side of the original trade and sell a new put or call, in effect keeping our sweet spot over the market range. If the market continues in the same direction, we will buy back the other side of the trade and sell a new put or call at the appropriate strike. These adjustments has the effect of moving our probability of profit up to 80% from 66%. In this example, we buy back all, or a portion of the original call and sell a new call at a lower strike, bringing in more premium.
In the last 10 years the S&P 500 has been down 4 times. Clients did not have to make up 30 to 50% losses as they did with traditional balanced and stock market only investments