Search found 5115 matches

by bobcat2
Tue May 22, 2018 11:10 am
Forum: Investing - Theory, News & General
Topic: Newton MA library program - Diversification & Managing Your Portfolio
Replies: 0
Views: 74

Newton MA library program - Diversification & Managing Your Portfolio

Something to check out if you are a Boglehead in the Boston area. Free program at Newton MA Free Library on Tuesday May 29 @ 6:30 PM. YOU AND YOUR FINANCIAL FUTURE: DIVERSIFICATION AND MANAGING YOUR PORTFOLIO Panelists discuss a variety of money-related topics. In this session: David Griswold , pres...
by bobcat2
Fri May 18, 2018 10:49 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

With these real bonds people can plan at least a portion of their retirement finances without having to make complicated calculations, such as forecasting portfolio expected returns, or resorting to using a retirement calculator, or hiring a financial advisor. Here's an example. If an investor wants...
by bobcat2
Wed May 16, 2018 10:14 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Here's Zvi Bodie earlier this month talking about retirement planning. While he doesn't explicitly mention the separation property, it is definitely the framework he is using in planning for retirement. For the surrogate for the risk-free asset he discusses duration matching with ST & LT TIPS funds...
by bobcat2
Wed May 16, 2018 3:04 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Here's Zvi Bodie earlier this month talking about retirement planning. While he doesn't explicitly mention the separation property, it is definitely the framework he is using in planning for retirement. For the surrogate for the risk-free asset he discusses duration matching with ST & LT TIPS funds....
by bobcat2
Sun May 13, 2018 8:30 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

Hi willthrill81, I'm assuming you are partnered, and probably married, so why aren't you including your partner's SS benefit in your retirement calculations? Kitces calculations are for people retiring presently. In 2045 or 2050 Social Security benefits overall will be higher. For example, the prese...
by bobcat2
Sat May 12, 2018 10:34 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

Being provided by the government, these would be default-free. Annuities are not default-free and we often see fear of insurance company default as a factor for why people are wary of them. Merton & Muralidhar expect these to be liquid, easy traded, and low-cost . All that is different from an annu...
by bobcat2
Sat May 12, 2018 10:24 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

SS & Medicare benefits are very valuable for retirees. Current combined benefits are about $1 million for many couples. By 2050 the value of of SS & Medicare benefits in 2015 dollars will be about $2 million for many couples. To ignore these benefits or value them at about $400,000 is wildly inaccur...
by bobcat2
Sat May 12, 2018 6:26 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

Hi willthrill81, $1.8 million is what you are short in lifetime benefits at retirement. So if want to know how much you need at retirement - the answer is an additional $1.8 million if you don't count SS & Medicare. These are discounted costs. The actual costs spread over average life expectancies a...
by bobcat2
Sat May 12, 2018 2:58 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

Per my above analysis, ignoring SS adds at most $600k to my needed portfolio at my planned retirement age, probably more like $400k. ... I don't see how you're getting $900k needed to ignore Medicare. Social Security & Medicare Lifetime Benefits & Taxes TABLE 15 Expected Present Value of Lifetime S...
by bobcat2
Sat May 12, 2018 11:16 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

Hi willthrill81, So, just to be clear, you add about $900,000 to what you need for retirement compared to what people retiring within the last 10 years have needed for health care. Have I got that right? And you also add about another $1,000,000 for the absence of Social Security income that people ...
by bobcat2
Sat May 12, 2018 10:31 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

As you note, we're probably talking about a maximum 'reasonable' range of $1.8M to $2.4M. The $600k is a chunk of money, but historically that's an average of only a few years of additional growth. Considering the uncertainty surrounding SS benefits according to the SS Administration (they say that...
by bobcat2
Wed May 09, 2018 11:59 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

One of the very nice aspects of these bonds is that because of their low price, median income households and households of the working near poor can purchase them at regular two week intervals in their DC retirement savings plans. These same households could not possibly purchase zero coupon TIPS on...
by bobcat2
Wed May 09, 2018 11:10 am
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Bob, I think this is what you are saying. 1) Real-world retirement planning should not be done on the basis of systematic purchases-then-withdrawals, from a portfolio of traditional mutual funds based on securities (stocks, bonds, near-cash) 2) The asset combination should be divided conceptually i...
by bobcat2
Wed May 09, 2018 9:13 am
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Bob, for the record-- I doubt that either of us thinks it amounts to anything --since about 2012 the bond component in Vanguard's target date funds has included a glide toward shorter duration at the same time as it replaces some nominal with inflation-protected bonds. I couldn't disagree more stro...
by bobcat2
Tue May 08, 2018 10:50 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

But I don't think the converse applies. A TIPS ladder is risk-free and has decreasing duration. A long and short-term TIPS fund, with the allocation systematically shifting away from the longer-term TIPS fund and toward the short-term fund also has decreasing duration, but I don't think it's equiva...
by bobcat2
Tue May 08, 2018 7:44 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Nor do I understand how a time-varying allocation to two different TIPS funds "protects against a loss" which is what you seemed to be saying, at one point, was necessary for you to call something a "hedge." It protects against a loss in a kind of partial or soft way, but so does a single TIPS fund...
by bobcat2
Mon May 07, 2018 9:13 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Why would two bond funds hedge risk, but one bond fund not hedge risk? If the Vanguard Total Bond Market Index Fund does not hedge the risk of the stock funds, what would be an example of two bond funds that would? With two bond funds you can duration match a liability over time by changing the wei...
by bobcat2
Mon May 07, 2018 9:06 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Here are links to three sites that discuss the differences among the three ways of transferring financial risk: diversification, hedging, and insuring. Links - Powerpoint presentation that is linked at the top of the Google page. Titled - Hedging versus Insuring against Price Risk https://www.google...
by bobcat2
Mon May 07, 2018 6:16 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Then bobcat2 said that a risk-free asset is a "hedge," because a hedge is any strategy in which you give up return in order to reduce risk. I didn't say that. I said the hedge protects against a loss (or limits the downside outcome) - not that it reduces risk. There is a big difference between thos...
by bobcat2
Mon May 07, 2018 5:36 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

You pick the year you want the 20 year payments to begin. Typically you would pick the year you are age 65 for the payments to begin. The deferral of ten years was simply an example. I'm guessing this would be set up so that the beginning year could be at least 40 years from the present. That way pe...
by bobcat2
Mon May 07, 2018 5:23 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

I never thought of a bond fund as a hedge. I always thought of a hedge as something that was specifically and only meant to limit downside, i.e. s.t. that goes up if the primary investment goes down. E.g. Primary investment is a stock. Your hoped for outcome is to have the primary investment go up....
by bobcat2
Mon May 07, 2018 3:27 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

Day9 wrote:
Mon May 07, 2018 3:23 pm
Any man who dies with more than $10,000 to his name has miscalculated. - Errol Flynn
Adjusting for inflation since the year Flynn passed away (1959) amounts to $86,000.
Still not much, once you include the house. :wink:

BobK
by bobcat2
Mon May 07, 2018 3:07 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

Using bonds for safe income beyond age 85 is a very expensive proposition. You know your chances of living to age 100 or more is very low. But you don't know if you will live three years or less, or ten years or more. If you plan for too few years you will face an income shortfall. If you plan for t...
by bobcat2
Mon May 07, 2018 1:05 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Re: Retirement bonds

I find these bonds to be a very interesting assets for retirement. They are basically zero principal 20 year bonds . Another way to think of them is mini 20 year fixed term income annuities. Use this for income up to life expectancy. Purchase longevity annuities over time as you age to replace the b...
by bobcat2
Mon May 07, 2018 12:16 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

How does SS fit into the overall scheme? It's in addition to the safe income from the TDF. The Efficient Frontier and the separation property only deal with your portfolio. It's in this sense that later work, including in particular Merton's contributions, provide a richer framework of dealing with...
by bobcat2
Mon May 07, 2018 11:30 am
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

So that pretty much says the target date funds I am aware of are doing it all wrong. DFA in their target date funds (TDFs) are basically following the separation property. Once the investor is about age 50 the TDF funds ditch nominal bond funds and replace them with ST & LT TIPS funds that roughly ...
by bobcat2
Mon May 07, 2018 10:37 am
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

The curve I always see is between two end points representing, I thought, two risky assets. How would the curve be drawn if there were, for example, three risky assets? Can't have a line with three end points, right? The curve is drawn the same way whether there are two risky assets or five risky a...
by bobcat2
Mon May 07, 2018 10:24 am
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

I intentionally left out discussion of more than two risky assets to focus on the main idea. I believe (if) it all applies to "n" risky assets, the diagram would then be n-dimensional , but the math to establish the shape and tangent point could be extended even if that was beyond my math skills! Y...
by bobcat2
Mon May 07, 2018 8:54 am
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Please indulge a question or two to help me understand. Is the PURPOSE of that as-yet-unnamed diagram to establish the "best" ratio (AA) between two assets in a risky portfolio? Once we have established that AA, do we use it to construct our risky portfolio and then use other criteria to decide how...
by bobcat2
Sun May 06, 2018 9:41 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

A risk-free (riskless) asset is a security that offers a perfectly predictable rate of return over the investment horizon. If the investment horizon is 6 months, a 6 month T-bill does that. If the investment horizon is twenty years, a zero coupon 20 year Treasury does that. There is no investing hor...
by bobcat2
Sun May 06, 2018 8:53 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Hedge - One hedges a risk when the action taken to reduce one's exposure to a loss causes one to give up the possibility of a gain. ... When you hedge, you eliminate the risk of loss by giving up the potential for gain. When you insure, you pay a premium to eliminate the risk of loss and retain the...
by bobcat2
Sun May 06, 2018 5:31 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Clarification question. The bond fund of 3-fund portfolio fame, is added not as diversification-to, but as a hedge-against the (more) risky assets? No, it does not. You could use 2 bond funds to hedge risk, but the bond fund in the 3-fund portfolio you are referring to does not do that. Here is a l...
by bobcat2
Sun May 06, 2018 1:45 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

When you add a surrogate asset for the risk-free asset to your portfolio of otherwise risky assets you are not further reducing risk by diversification. Instead the safe asset is further reducing risk by hedging. Agreed. Except I wouldn't even call it "hedging." The whole point about the risk-free ...
by bobcat2
Sun May 06, 2018 12:46 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 44
Views: 3907

Retirement bonds

The French government will soon be presenting possible reforms to the French retirement system. Three financial economists, Americans Robert Merton and Arun Muralidhar and French financial economist Lionel Martellini have proposed the creation of government retirement bonds as part of the solution. ...
by bobcat2
Sun May 06, 2018 8:23 am
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

When you add a surrogate asset for the risk-free asset to your portfolio of otherwise risky assets you are not further reducing risk by diversification. Instead the safe asset is further reducing risk by hedging. A classic example of a surrogate safe asset would be the retiree with a TIPS bond ladde...
by bobcat2
Fri May 04, 2018 10:35 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

I'm trying to understand relationships between variables, and I'm using figurative language. I am saying "if you imagine a set of different assets that are relatively less and less risky... Stocks-plus-Total Bond to Stocks-plus-Short-Term Bond Index to Stocks-plus three-month Treasury bills to stoc...
by bobcat2
Fri May 04, 2018 10:20 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

From the book Capital Idea s by Peter Bernstein . Tobin detected a weakness in Markowitz’s model. Markowitz assumed that investors select securities for their portfolios from a universe consisting totally of risky assets. He pays no attention to investors who might control risk by expanding the uni...
by bobcat2
Fri May 04, 2018 8:30 am
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

nisiprius wrote:
Fri May 04, 2018 7:10 am
...the efficient frontier for three risky assets, and you move one of the assets so that it becomes less and less risky and finally becomes riskless.
What does that mean :?: How do you move a risky asset so it becomes riskless :?:

BobK
by bobcat2
Thu May 03, 2018 3:52 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

I think Fama would approve of a US Total Stock Market fund because it can be managed efficiently--not a lot of companies entering and leaving the index. But he has also said that indexing is stupid, probably thinking of the Russell 2000 and other predictable indexes. This thread is about Tobin's se...
by bobcat2
Thu May 03, 2018 12:30 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

https://imgur.com/3RMQClZ.png is an "efficient frontier diagram." The availability of a riskless asset is of great importance. It determines a single optimal portfolio from a range of efficient portfolios. But despite the fact that it took a second Nobel prize to get there, there is no special name...
by bobcat2
Thu May 03, 2018 11:01 am
Forum: Investing - Theory, News & General
Topic: Everything You Need to Know on an Index Card
Replies: 33
Views: 3995

Re: Everything You Need to Know on an Index Card

What I would write on the index card. There is no royal road to personal finance and investing. If all you can absorb about finance is what is put on an index card, you need to hire a good financial advisor. Unfortunately, simply knowing how to pick a good advisor takes more knowledge about finance...
by bobcat2
Wed May 02, 2018 11:48 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Question for BobK. Does the risky asset have to be equity? No, but typically the mix of risky assets is mainly equity. Stated differently, could my portfolio choice be risky = total bond, and risk free = TBills? It could be, but that would be unusual. That's true both on the risky asset side and th...
by bobcat2
Wed May 02, 2018 8:49 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

James Tobin on how to change the amount of risk in your portfolio. You would choose the same portfolio of nonsafe assets regardless of how risk-averse you were. Even if you wanted to change the amount of risk in the (overall) portfolio, you’d do it by changing the amount of the safe assets relative ...
by bobcat2
Tue May 01, 2018 5:53 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

The risk-free rate of return on the chart (the vertical intercept of the straight line) is not a hypothetical value. It is the rate of return for the best surrogate asset you can find for the theoretical risk-free asset. What asset to use as the best risk-free surrogate depends on the situation. Som...
by bobcat2
Sun Apr 29, 2018 8:55 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

... because the early papers that defined what's now called "modern portfolio theory" have charts of curves of mean and standard deviation, but the capital markets line and the tangent portfolio seem to be associated with CAPM, which came later. This has nothing to do with CAPM. If it were associat...
by bobcat2
Sun Apr 29, 2018 3:46 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

The efficient portfolio frontier is defined as the set of portfolios of risky assets offering the highest possible expected rate of return for any given standard deviation. from Bodie and Merton, Financial Economics . The separation theorem combines the above portfolio of risky assets with the low ...
by bobcat2
Sun Apr 29, 2018 3:32 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Nisiprius We're looking at a standard deviation of 4, compared to something like 0.75 for Treasury bills and of course 0 for an ideal riskless asset. A short-term US bond fund, which sometimes goes down by a small amount, is qualitatively different from a bank account which never does. I'd have said...
by bobcat2
Sun Apr 29, 2018 1:53 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

From Wikipedia. A combination of assets, i.e. a portfolio, is referred to as "efficient" if it has the best possible expected level of return for its level of risk (which is represented by the standard deviation of the portfolio's return). Here, every possible combination of risky assets can be plot...
by bobcat2
Sun Apr 29, 2018 1:26 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

...A money market fund is a low risk asset. It does not belong in the efficient frontier of risky assets. The portfolio of assets on the efficient frontier consist solely of risky assets. There is no efficient frontier that looks almost straight with a hook on the end... I was trying to find the mo...
by bobcat2
Sun Apr 29, 2018 12:07 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6117

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Steps in applying the separation theorem. 1) Decide what risky assets to include in your portfolio. All possible combinations of the risky assets compose the minimum variance frontier of risky assets. Those combinations of risky assets that lie to the right and above the minimum variance combination...