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expected, 111–13 passive investing, 43-46, 154-157 stock market, 43, 68, 81, 100-02, 103-05, 171, 177, 258 risk. See also Fama/French Five-Factor Model; risk capacity; risk exposure CAPM and, 171-175, 187 overview, 164, 187 return relationship to, 164-67, 171-74, 238-41 standard deviation and, 166-171, 241 stock market, 170-71, 176, 186-87, 231, 234-35 style drift effect on, 136 systematic/unsystematic, 171,-174, 231 Three-Factor Model, 174-75, 187 risk capacity assessment of, 204-05 attitudes about risk, 43, 209 conservative (ice blue), 223, 240-44, 254-55 income/savings rate and, 43, 204, 213 investment knowledge and, 43, 204, 215 liquidity needs and, 43, 204, 234 moderate (sea green), 221, 240-44, 252-53 moderately aggressive (dark blue), 219, 240-43, 250-51 most aggressive (red), 217, 240-44, 248-49 net worth and, 32, 43, 181, 211, 234 overview, 43, 202 risk exposure matching to, 205, 245-46 time horizon and, 43, 205, 207, 234 risk exposure commodities and, 228-29 diversification and, 73-74, 173, 179, 183, 226, 231-34, 243 index portfolio mix, 238-47 overview, 226-27 portfolio construction, 234-38 risk-calibrated portfolios, 233-38

Index

Index Funds: The 12-Step Recovery Program for Active Investors  

This book reveals the potential land mines and pitfalls of active investing and educates readers on the benefits of passive investing with i...

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