Flirting with Models

Research Library of Newfound Research

Tag: diversification (Page 2 of 6)

Benchmarking, Behavioral Biases, and the March Madness Tournament Challenge Recap

Our 2018 March Madness challenge is all wrapped up! In this post, we highlight many of the same pitfalls with benchmarking and behavioral biases that we see in investing.

Failing Slow, Failing Fast, and Failing Very Fast

Failure to meet your financial objectives can take one of two forms: fast failure and slow failure. Failing fast involves suffering large losses at the wrong time as the result of taking too much risk. Failing slow involves achieving insufficient growth due to taking too little risk.

March Madness for Investors

March Madness competitions with non-standard rules have many parallels to investing. Diversification, model development, backtesting, and evaluating assumptions all come into play.

Portable Beta: Making the Most of the Returns You’re Already Getting

In theory, investors should gear the most risk-efficient portfolio; in practice, few do. Portable beta may help investors create more efficient portfolios.

Managing Capital Market Assumption Risk

A robust portfolio is better than an optimal one. Mitigating the risk of incorrect capital market assumptions is important in mean variance optimization.
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