A review of the most important things investors should understand about Asset Allocation [1], Diversification [2] and Correlation [3].
This paper addresses a number of topics related to the subjects mentioned in its title:
1. Why investors might prefer a maximum performance portfolio [4] based on a profit-loss evaluation metric,
2. Why investors might prefer a portfolio where performance is more directly linked to future liabilities (education, retirement, etc.),
3. Recent academic research on the fundamental principles of portfolio design,
4. How the recent bear market changes risk/reward perceptions, and
5. How to incorporate new research into investment decisions during periods of downside volatility [5].
| Attachment | Size |
|---|---|
| Investment_Basics.pdf [6] | 238.82 KB |