Topic: Portfolio Management

Best Sector for Long-term Investment

Long-term investment may mean different thing for different people, but for me and for the purpose of this article, let’s say we are looking at an investment horizon of 8-10 years. If I ask you to make an investment for this long a period, i.e., invest and forget, and...

What is Tracking Error

Tracking error is a measure of how closely a portfolio follows its benchmark. A tracking error of zero means that the portfolio exactly follows its benchmark. The benchmark could be an index such as S&P 500 index. Let’s say the S&P 500 index provides a return...

Calculate Risk-adjusted Returns Using Beta

The risk-adjusted return of a portfolio or an asset can be calculated using the Capital Asset Pricing Model. Using this model, we calculate the expected return on the asset commensurate with the risk in the asset. The asset’s beta is used as the measure of risk, which...
How to Build Efficient Frontier in Excel

How to Build Efficient Frontier in Excel

As we know, an efficient frontier represents the set of efficient portfolios that will give the highest return at each level of risk or the lowest risk for each level of return. A portfolio is efficient if there is no alternative with: Higher expected return with same...

Page 1 of 1012345...10...Last »