Flirting with Models

The Research Library of Newfound Research

Tag: portfolio construction (Page 2 of 4)

Separating Ingredients and Recipe in Factor Investing

Factor portfolio construction has two key elements: ingredients (the signals used to pick investments) and recipe (the rules used to translate those signals into allocations). While the ingredients often get the most focus, the recipe can have just as large of an impact on returns.

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.

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.

Embracing Conflict in Asset Allocation

Embracing conflict in asset allocation by using multiple approaches can help investors harvest the sizable benefits of process diversification.

J.P. Morgan Outlook Implies Satellite Bonds Are King

J.P. Morgan's 2016 capital market assumptions imply that satellite bonds are king and core stocks and bonds must be complemented with alternative exposures.
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