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Cost of Capital (WACC)

There is no number in finance that is used in more places or in more contexts than the cost of capital. In corporate finance, it is the hurdle rate on investments, an optimizing tool for capital structure and a divining rod for dividends. In valuation, it plays..

Weighted Average Cost of Capital (WACC)

...the role of discount rate in discounted cash flow valuation and as a control variable, when pricing assets. Notwithstanding  its wide use, or perhaps because of it, the cost of capital is also widely misunderstood, misestimated and misused. (Quoted by: Mr. A. Damodaran).

In a recent paper issued by ...

Top BrandZ 2017 - Selection from Top 100

Technology giants Google, Apple, Microsoft, Amazon and Facebook take the top 5 places in the 2017 BrandZ top 100 most valuable global brands ranking released by WPP and Kantar Millward Brown.

Top BrandZ 2017 (Top 10)


It is also very interesting to see, that 25% of the total value of the 100 most valuable global brands is made up of the combined brand value of the tech's 'Fearsome Five', emphasising their dominant positions in the modern business landscape.

David Roth, CEO EMEA and Asia of The Store WPP said: "Dubbed the 'The Frightful Five' by some, the tech giants ...

Rendite deutscher Staatsanleihen
(Reale Verzinsung neg.)

Die Wirkung der Anleihekäufe der EZB auf die Marktverzinsung von deutschen Staatsanleihen ist sicher substanziell. Ein Investment in deutsche Staatsanleihen ist bis zu einer Laufzeit von sechs Jahren mit einem Kapitalverlust verbunden:

Deutsche Staatsanleihen (Rendite/n per Aug./Sep. 2017)

Noch dramatischer zeigt sich die aktuelle Zinslandschaft, wenn man den zukünftigen Kaufkraftverlust des eingesetzten Kapitals berücksichtigt. Die reale Verzinsung (nominelle Zinsen minus gepreiste Inflationserwartungen) von deutschen Staatsanleihen liegt trotz günstiger Konjunkturaussichten auch ...

"The Permanent Portfolio"

The Permanent Portfolio is an approach to creating a diversified portfolio using a static asset allocation. I computed a Backtest on a reasonable "Minimum-Investment-Horizon" resulting in a 3 years-investing period as a senseful minimum in order to achieve a high...

Permanent Portfolio (2003 - Juli 2017), rG-Idea


...probability of achieving a positive outcome. The idea of a "Permanent Portfolio" may tempt some investors. The premise is simple: invest in a carefully chosen collection of non-correlated assets and occasionally rebalance. It sounds easy, but how did this "idea" perform?


The idea is about ...

Investitionsquote "Aktien"
(Mag. R. Gollner, skizziert)

Wie hoch kann die Aktienquote in einem "dedicated stocks-portfolio" sein - immer 100% oder abhängig von Bewertungskennzahlen, etc. zwischen 25% und 75% schwankend? Die Investitionsquote kann man im Zeitverlauf mittels Zukäufen und...

Dedicated Stock-Investment Portfolio (rG, Investitionsquote), Aug. 2017


...(Teil-)Verkäufen dynamisch steuern. In meinem hier skizzierten "Real-Depot" -Ansatz sieht man, dass die Aktienquote in meinem "dedicated Stocks-Investment-Portfolio" aktuell ca. 46% beträgt. Gründe hierfür sind tlw. die Saisonalität, (m)ein Faible für aktives Risiko-Management in tricky periods (D. ...

Retirement & Dividends

The end goal of many dividend growth investors is to create a dividend stock portfolio (composed of ETFs or even individual stocks) that generates enough income to cover their retirement expenses. With that in mind, this article investigates your chances...

Retirment Portfolio 70k Annual Income and TimeHorizons (Saving Rate)

...of retiring off of dividend income using different savings rates and time horizons.


Some Benchmark Parameters & Assumption

If you are investing in broad-based index ETFs (which is a great choice for the vast majority of investors), then the two most important factors in your long-term investment success ...

Walter Schloss
"Ben Graham - Student"

As he highlighted in Walter Schloss: Searching For Value, low Debt to Equity ratios were a cornerstone of his selection process. Another key consideration were dividends. It's common for management to think of their own bonuses before...

Walter Schloss (Searching for Value)


...the welfare of shareholders, especially as option grants have become more widespread. As a check on mindless self-interest, Walter Schloss also looked for dividends. [He said:] "I like the idea of company-paid dividends, because I think it makes management a little more aware of stockholders…"

In another ...

rG versus Warren Buffet
(*ggg*)

You may have never seen Buffett’s performance broken out by decade (?). Well, here are the annual returns against the S&P 500 starting in 1965 and going through 2009: The 80s and 90s I always refer to as the KINDERGARDEN-years...

 

Aug. 2015 - June 2017 (Ralph Gollner, Warren Buffet); Backtest only...(easy returns, low risk), which led to the eventual greed-peak in the year 2008 (Real-Estate Bubble).

My personal investing-strategy (Ralph Gollner) around my core-holdings in my stocks-portfolio is to concentrate the Long-Term Strategy around those companies, which already built and are still building their Moat in order ...

Why Investors may combine Value & Momentum Investing Strategies...

Many investors recognise that stand-alone value and momentum investment strategies have historically worked. Of course, these strategies don't work all the time and can also have long streaks of bad performance. But...

Value, Momentum versus "Benchmark" (S&P 500), 1927 - 2015

...long-only value and momentum investing, while interesting, don't represent the most puzzling anomaly from financial research (the table above will be explained in more detail below !).

Let's ask a basic question: What happens when one examine long-only value and momentum investment portfolios? So ...

Sparplan-Simulation auf den DAX
(April 2015 - Juni 2017)

Im April 2015 lag der Indexstand des DAX beim damaligen Allzeithoch: bei ca. 12.370; Der Tiefpunkt wurde dann im Jahr 2016 bei ca. 8.750 Punkten markiert. Durch einen regelmässigen Ansparplan kann man solche Schwankungen nutzen!

Sparplan DAX (exemplarisch April 2015 - Juni 2017)


Um ca. 7% p.a. (oder mehr wie im Beispiel) zu erzielen muss bei Aktien ein langfristiger Anlagehorizont gewählt werden. Der DAX hat sich mit einem Investment von 1970 - 2015 dabei mit jährlich 8,4% p.a. entwickelt. Diesen Wert und alle weiteren bis 1965 kann man auf der Homepage des DAI nachschlagen (DAI ...

Die Phase des Vermögensaufbaus

a) Die Herausforderung: Vermögensaufbau für das Alter ist eine Sache der Disziplin - vor allem in jungen Jahren. Wer Monat für Monat und Jahr für Jahr spart, kann aus kleinen Summen einen großen Kapitalstock heransparen,...

Sicherheit, Liquidität, Rendite

www.wienerborse.at/wissen

...der später im Ruhestand aufgezehrt werden kann. Vor allem der Zinseszinseffekt hilft: Wer etwa mit 37 Jahren 1.000 Euro für 8 Prozent (Geduld und etwas Wissen vorausgesetzt) anlegt, kann daraus mit 67 Jahren auch schon eine schönes Sümmchen gemacht haben. Wer schon mit 27 anfängt, hat wohl indes mehr als ...

Berkshire Hathaway versus Renaissance Technologies
"Warren Buffet vs. James Simons"

A Hedge fund makes 2.4 more than Buffett...
While many believe that value king Warren Buffett is the greatest investor of all time, his 17.1 per cent average annual return over the last 29 years looks...
 

Berkshire Hathaway (BRK-A) stock from Dec. 1987 - May 2017

 
...very pedestrian compared to those produced by the 90 PhDs employed by the USD 10 billion quant shop, Renaissance Technologies.

According to Bloomberg, the notoriously secretive hedge fund has delivered an extraordinary compound annual average return of 40.6 per cent after its huge fees since 1988 ...

DAX-Sparplan - Szenario bei "Worse Case"
(Juli 2017 bis Juli 2025)
Anlagehorizont somit ca. 8 Jahre

Der durchschnittliche Kaufkurs eines monatlichen DAX-Sparplans, welcher nun per Juni/Juli 2017 starten würde, würde bei einem starken Absturz des DAX auf ca. 8.000 Punkte bis in das Jahr 2019...

Sparplan Szenario (Beschwichtigung für den/die "Kleinen"), Mag. Ralph Gollner (Juni 2017)

...hinein, bei ca. 9.630 DAX-Punkten liegen (Durchschnitts-Kauf-Level von ca. 9.630). Nachdem Aktienindizes grundsätzlich nicht auf Null (also WERTLOS) fallen, würde der DAX somit dann früher oder später wieder drehen und langfristig steigen.

Als kurzer Reminder sei im folgenden Schaubild die ...

The "connected cars" market

Transportation is a key enabler of the economy, and the global automotive industry itself generates USD 5trillion in annual output. Companies involved in transporting people and goods are increasingly focused on introducing autonomous...

The "connected cars" market

...alternatives, those which can operate without human input using sensors, radars, cameras etc. Although fully self-driving vehicles are not yet in the mainstream, partially autonomous cars and trucks are already a reality today. Some of the main companies are well-known players in the automotive industry, but aspiring ...

ÖBIB

Folgend einem Artikel in der Wiener Zeitung vom 6. März 2017 schlägt Infrastrukturminister Leichtfried vor, mit den ÖBIB-Dividenden aufstrebende Start-up-Firmen teilzuverstaatlichen, um sie und die Arbeitsplätze im Land zu halten. Die ÖVP zeigt ihm die kalte Schulter.

ÖBIB (Dividenden von ÖBIB an den Bund; seit 2003: in Summer EUR 2,8 Mrd.)

Die ÖBIB könnte so zu einem Instrument für die Standortsicherung ausgebaut werden, erklärt der Minister. Dabei gehe es ihm darum, Jobs und Firmen in Österreich zu halten. "Ich möchte, dass wir in Österreich mehr für den Standort tun."

Leichtfried schlägt vor, die Dividenden der ÖBIB - in den vergangenen fünf ...

Geldanlage: Hohes Sicherheitsbewusstsein der Österreicher

In kaum einem anderen Land ist die Scheu vor Anlagealternativen so groß wie in Österreich. Einzeltiteln wird besonders hohes Risiko zugesprochen. Am wohlsten fühlt man sich hierzulande mit Immobilien gefolgt vom Sparkonto.

Hohes Sicherheitsbewusstsein der Österreicher (Q3-2016)

Das "gefühlte Risiko" ist besonders hoch, vor allem bei Einzeltiteln. 68% der Österreicher sind der Meinung, dass mit dem Kauf von Unternehmensaktien ein hohes finanzielles Risiko verbunden ist. 51% sprechen Investmentfonds ein hohes Risiko zu und 44% den Anleihen. Deutlich schwächer ist die Angst vor ...

USA (Home-Bias)
Period: 1975-March 2017

Fascinating: Everyone is afraid of the BIG BLACK SWAN. Even if this animal may only occur once in a time-period of 42 years. Isn't life much too short to be afraid of ONE Black Swan? Think about it ;-)

US Home-Bias Portfolio (Warren Buffet likes his Home-Bias, I guess...)

 

Sometimes a chart says more than a thousand words, but well there are exceptions. Bankers used to say one should stick to a portfolio with 60% stocks and 40% bonds. I just want to mention that Bonds usually rise, when interest rates fall. Just a short reminder, that interest rate fell from 1990 onwards...to a low level (where we are just ...

What is the 'Sortino Ratio' ?

The Sortino ratio is a variation of the Sharpe ratio that differentiates harmful volatility from total overall volatility by using the asset's standard deviation of negative asset returns, called downside deviation. The Sortino ratio takes...

 

Sortino-13 Portfolio (period: 2000 - 2013)

 

...the asset's return and subtracts the risk-free rate, and then divides that amount by the asset's downside deviation. The ratio was named after Frank A. Sortino.

BREAKING DOWN 'Sortino Ratio'

The Sortino ratio is a useful way for investors, analysts and portfolio managers to evaluate an investment's return ...

Backtest (March 2009 - 2016)

In the year 2009 the market was definitvely undervalued, if one believed in the continuation of the financial system...(please recheck valuation metrics, like Price-Book or Price/Sales, etc.). I made a backtest (one of many) and eventually may...

Portfolio 1 (Backtest), 2009 - March 2017

...have found a possible Asset-Allocation for resilience in these markets. (I named my backtest "Portfolio 1"; a possible Benchmark for a pro-risk-approach-Benchmark is given here with an "Index Fund").

Some rules on the way (in German we say: "Der Weg ist das Ziel"):

Preparing a Strategy. Knowing about history, ...

30years Investment Horizon (?)
Starting point: Check out the current Valuation (e.g. Price/Earnings)

People really motivated to invest for a time frame of 30-years? Given the lack of ability, and or desire, to save in younger years most people begin to get serious about saving money around...

3 Reasons for Investor Shortfalls

...35 years of age on average. Let's assume a retirement age of 65 which puts our saving and investing time frame at 30-years. If, as a millennial investor, you really want to save and invest for retirement you should understand a minimum of how the markets really work.

Markets are highly ...

Branchen-ETF
(more risk, some fun?)

Hier ein Backtest (somit reine ex-post Betrachtung und Berechnung) eines Sparplans auf einen Branchen-ETF, welcher auf Unternehmen konzentriert, die im Consumer-Goods Bereich tätig sind:

Branchen-ETF (Backtest "only"), Sparplan

Gleich ein Sprung ins kalte Wasser:

Zufriedenheit sollte sich mit einer positiven Rendite einstellen (Status Quo: Positive Jahresrendite - bzw. Rendite auf 'rollierender' 12-Monatsbasis). Diese Zufriedenheit kann noch weiter gesteigert werden, sofern diese positive Rendite über...

Ein langer Weg beginnt mit dem ersten Schritt (Laotse)

der "durchschnittlichen Gesamtmarkt-Rendite" (der letzten 12 Monate) liegt.

Unzufriedenheit mit einer negativen Rendite (einfach gesagt: negative JAHRESRENDITE): Interessanterweise betrifft dies wohl sehr viele Österreicher, die zwar nominal eine positive Rendite auf ihr angespartes Geld erhalten (positiver ...

Der Value-Zyklus (NOW?!)

Value-Investoren profitieren von Markt-Ineffizienzen. Der heutige Wirtschaftsnobelpreisträger Fama und sein Kollege French wiesen 1992 - wie andere Wissenschaftler vor und nach Ihnen - in den USA im Zeitraum von 1962-1989 die Existenz einer Value-Prämie nach.

Der Value-Zyklus (1930 bis 2016), Quelle: starcapital.deQuelle: www.starcapital.de/research/value-zyklus

In ihrer Studie erreichten Firmen, die ein niedriges Verhältnis zwischen Buch- und Kurswert aufwiesen (günstige oder Value Aktien), langfristig höhere Renditen als Firmen mit hohen Buch-Kurswert Verhältnissen (teure oder Growth Aktien). Obwohl die ...

Long-Term Investing (Recheck Kelly-formula!)

John Larry Kelly war eigentlich ein renommierter Physiker bei AT&T. Berühmt wurde er jedoch aufgrund einer - nur auf den ersten Blick - schrägen Errungenschaft: einer auf einem wahrscheinlichen Wissensvorsprung...

Kelly Criterion/formula (rechecking the odds for a 10years-long investment strategy), Ralph Gollner (March 2017)

... beruhenden Gewinnformel...für Pferderennen. Das könnte auch auf dem Kapitalmarkt funktionieren.

Das nach ihm benannte Kelly-Kriterium geht so: Ein Spieler, der zwar nicht sicher weiß, wie das Rennen ausgeht, es aber aufgrund seiner Erfahrung, etc. besser weiß als sein Buchmacher, kann seine Gewinne auf mittlere und lange ...

THE MOST ADMIRED Companies SURVEY

As Fortune has in the past, Fortune collaborated with their partner Korn Ferry Hay Group on this survey of corporate reputations. From that list I am backtesting a 10-stocks-portfolio:

Admired10-2014 Portfolio; BACKTEST only (Jan. 2014 - Jan. 2017), Online-tool used: portfoliovisualizer.com

The company which could hold its #1-place in all three years (2014, 2015, 2016) was: Apple, therefore I had to choose that company as a Portfolio-component for each of my Backtests (Portfolio1, 2 and Portfolio 3). In the last year, following the Fortune-Survey 2016 I had to switch two companies to make place free for 2 new components, being Microsoft and Facebook.

In ...

DAX vs. 8 Aktien - Experiment/Backtest
03/2009 - 02/2017

Hätte man sich im März 2009 entscheiden, einige deutsche Aktien in sein Portfolio zu packen, wie hätte sich dieses (evtl.) entwickelt? Dieser hypothetischen Frage habe ich mir angenommen, welche Aktien man wohl gekauft hätte?

DAX vs. 8 Aktien - Experiment/Backtest (Mag. Ralph Gollner), Status: 02/2017

Im Zuge der (damaligen) Weltuntergangs-Stimmung hätte man wohl zu Aktien gegriffen, welche zumindest noch in 5 oder 10 Jahren für die globale Wirtschaft relevant "gewesen" wären, bzw. deren Dividendenrenditen oder Bilanzen einen zuversichtlichen Eindruck hinterlassen haben.

Wie gesagt geht es um den ...

Factors (Value, Size, Momentum)
versus Correlation

Looking over the past 15 years of factor returns for value, momentum, and size, one can see a pretty consistent picture of outperformance, and in some cases quite sizeable outperformance. We'll call these "alpha factors"...

Factors (Value, Size, Momentum) versus Intrastock-Correlation (1997-2016)*12-Month rolling average excess returns (vs MSCI USA) for MSCI USA Enhanced Value, MSCI USA Momentum, and MSCI USA Size Tilt indexes are shown against the 6-month average of median S&P 500 1-day correlations over the past trading quarter.

...as their general design is to outperform indices overtime, typically as ...

Anlegerverhalten (Umfrage 2016)

Die Mehrheit der deutschen Anleger ist verunsichert bis ratlos. Mehr als Dreiviertel der Deutschen wissen nicht, wo und wie sie ihr Geld noch sinnvoll anlegen können. Gleichzeitig ist mehr als ein Drittel unzufrieden mit ihrer Anlage.

 

77% der Anleger wissen nicht, wie und wo sie ihr Geld sinnvoll anlegen sollen/können... (Q4-2016)

Dies zeigt eine aktuelle Studie (Dez. 2016); Während Profis immer komplexere Antworten auf das Niedrigzinsumfeld finden, verzweifeln die meisten Privatanleger mittlerweile an der Herausforderung Kapitalanlage. Das jedenfalls legt eine repräsentative Umfrage nahe, die die das Meinungsforschungsinstitut Forsa im Auftrag ...

Diversification and its possible effects in a crisis or bear market (header picture)

Riding through a FULL MARKET CYCLE (Bull cycle incl. Bear-Market-cycle) the famous point of Diversification while holding on to your investments through the full cycle - should prove to be of value. Let's see, what some pundits want you to believe to be a reasonable equity-centric Quintessential Global Portfolio:

 

 

 The portfolio-split above can be replicated with ETFs; A possible selection would look like the following:


Hypothetical portfolio for illustrative purposes only !

To get a quick idea, what the long-term evolution of such a Quintessential-Portfolio looked like, please ...

Sectors - Performance U.S.A. (1999 - Nov. 2016)
Earnings & Sector-Performance (!)

It is always interesting to see, that investors forget that it is more about sticking with the right sectors than picking the right stocks at the right time. In theory most know that...

Sectors - Performance U.S.A. (1999 - Nov. 2016)

But the chart above only gives you an idea of the possible returns over a long period from the year 1999 (shortly before the .COM-BUST) through the financial crisis in 2008, 2009 unitl Nov. 2016, when the presidential election of Donald Trump took place. In the next table you will see the average annual returns, expressed ...

ETF-Savings/Investment Plan (2007-Nov. 2016)

Vanguard's market share keeps growing. Only Vanguard and Dimensional Fund Advisors saw net inflows in November 2016. The Vanguard Group now has one in every five dollars in the USD 16 trillion mutual fund industry, according to Morningstar.

US-Stock-Index-ETF Savings Plan (100 USD per month from Jan. 2007 onwards, Nov. 2016)

Vanguard, which has nearly USD 3 trillion in U.S. mutual fund assets, is riding the wave of passive investing, which shows no sign of cresting. Overall, passively managed U.S. stock funds saw an estimated net inflow of USD 9.6 billion in November, versus a net outflow of USD 67.5 billion from actively ...

Pensionsfonds Global und AT

Artikel erstellt auf Basis des genialen Inputs von C. Schmale. Folgende Grafik zeigt, wie viel Vermögen Pensionsfonds verschiedener Länder im Vergleich zur Wirtschaftsleistung angehäuft haben. Das Urteil ist ganz deutlich.
 
Unterschiede bei der Bedeutung von Pensionskassen (Global), 2011, 2016
 In Deutschland und Österreich haben Pensionsfonds im Vergleich zu anderen Ländern kaum Vermögen. Pensionskassen und Pensionsfonds haben allerdings nicht in allen OECD-Staaten die gleiche Bedeutung. In Österreich etwa ist der Anteil des Pensionskassenvermögens mit etwa fünf Prozent des jährlichen Bruttoinlandsprodukts (BIPs) ...

What's the Worst 10 Year Return From a 50/50 Stock/Bond Portfolio?

Here my chart from 1972 up to Oct. 2016. I then had the idea to research for possible "hard periods before". I finally found an answer to my question about what the worst 50/50 portfolio of stocks and bonds...

History US Stock Market, 10-year Treasury (1972 - 10/2016)


...would look like. I found some research on the internet: Mr. Ben Carlson decided to run the numbers. But before showing the table with the Rolling-Returns for a 10-year period of a fifty/fifty portfolio made up of stocks & bonds, please take a look at the Compound Average Returns for each of the two assets ...

Initial investment and monthly contributions (ca.7 years)

How to invest into the stock market while being risk-averse regarding ones emotions ("loss aversion"), but still feeling motivated to directly invest into stock-index-products? Well, here i am displaying a...

Investment and monthly contributions over 7 years, S&P 500 (recheck 2000 - Oct. 2016)

...US-Stock-INDEX-ETF (Portfolio 1/orange) and a European Stocks-Investment (Portfolio 2/blue). The red line, more or less linear, represents the cumulative amount over the whole investing period. From year to year the investment amount is rising by USD 1,800 since the monthly contribution-plan is established at USD 150.

...

Who or what is Renaissance (Competition ;-)
(My backtest 2004 - Oct. 2016)

These guys are amazing and brilliant. The gentlemen at Renaissance succeeded in achieving unbelievable annual returns from 1988 onwards. Motivated by them I created a backtest, which I want to present here:

My Longer-Term-Backtest (2004 - 2012)


Well, I have seen far better performing benchmarks than the S&P 500 - so I am now even more motivated knowing what is THEORETICALLY achievable, especially on a constant base (recurring).

MY BACKTEST (only) Performance-Data and Risk-Numbers (2004 - 2012)
...

Benjamin Graham on "Asset Allocation"

Warren Buffett once stated in an interview that Graham's book, "The Intelligent Investor," had changed his life and set him on the right path. Buffett was referring to Graham's theories on value investing and bringing a form of professional analysis to the investment markets.

Graham is often called the "Dean of Wall Street" and the father of value investing. One of the most important early proponents of financial security analysis, Graham was so influential that he helped draft the Securities Act of 1933. He championed the idea that the investor ...

Das "Marktportfolio" (Status: 2015)

Panthera Solutions hat den globalen Kapitalstock vermessen! 1964 postulierte William Sharpe das Marktportfolio als Ausgangspunkt der Portfoliokonstruktion. Nach zwei Jahren Forschung legt Panthera Solutions eine Näherung zum Marktportfolio vor:

Das "Marktporftolio", Quelle: Panthera Solutions

Für die Vermessung des globalen Kapitalstocks wurde das Anlagevermögen der folgenden 11 Assetklassen für den Zeitraum 2005 bis 2015 erhoben: Aktien, Staatsanleihen, Bankanleihen, Unternehmensanleihen, Securitized Loans, Non-Securitized Loans, Cash Equivalents, Cash, Immobilien, Land und Privatunternehmen.

...

Inflationproof (?) ALLWETTER_rG_Portfolios
(Backtest)

Der Zeitraum 1980 - 2007 war -als Paket- ein hochprofitabler Anlagezeitraum für Aktionäre. Aber auch Anleihe-Investoren durften den Rückenwind von fallenden Zinsen geniessen (Finanztheorie: Fallen die Zinsen, steigen Anleihepreise):

Allwetter-Portfolios rG (2003 - Okt. 2016)


Konnte man in den 80ern und 90ern des letzten Jahrhunderts relativ blind mit Aktien und Anleihen die steigenden (globalen!) Finanzmärkte mitreiten, hat sich das Anlageuniversum in den ersten Jahren nach dem Millenium as etwas herausfordernder dargestellt.



Die Jahre 2000, 2001 und 2002 dienten ...

The power of a "US-biased" Portfolio
(covering the period 1972 - 2015)

Warren Buffet knows this period very well. In the year 1973 the wealth of Mr. Buffet stood at ca. USD 34 million. In 2013 it stood around USD 58.5 billion. That is the power of compounding interest !

Portfolio Growth (US-biased Portfolio with international assets), 1071 - 2015

In the example above I took a more conservative approach - in this backtest. A Buy & Hold Asset-Allocation structure, which relied on the US-Stock-Market, International stocks, EM-stocks, the 10-year-treasuries as Bond-component and Gold as a 19%-buffer. This collection of assets performed pretty well over the long ...

Dow Jones Ind. Average-components (1999-10/2016)
(9 selected stocks of the DJIA-universe)

In the last years, but also in the recent decades, people want to call the "BUY & HOLD"-Strategy over and gone. Well, following charts might tell a different story. Take a look:


Selected Dow Jones Ind. Average-components (1999 - Oct. 2016)

The "Portfolio 1", consisting ONLY of 9 selected Dow Jones Industrial Average-components which were also part of the DJIA back in the year 1999 (!), before the .COM-Bubble finally burst is still holding up strong against its own mothership, the Dow Jones IA, but also against the very broad Stock-Market, indicated by the ...

Timing Strategy (Risk-reduction in US-Stock-Markets)

I call this Timing-Strategy (BACKTEST only!) "S&P 500-Pattern-Recognition-36MO-Simple-Switch_gld". I checked different styles, but eventually this version produced only 3 neg. years since 1991, versus 23 POSITIVE YEARS

Timing Strategy (S&P 500 - Pattern Recognition -36MO - switch_gld) 1991 - Oct. 2016, tool used: portfoliovisualizer.com

The good part about this strategy is, that it helped to avoid some of the biggest Downturns in the years after the .COM-Bust in the year 2000.  The Strategy was staying invested in the S&P 500 from 1991 until February 2001. After taking a break until Oct. 2003 and investing in "alternative assets" (avoiding the ...

Watch out for the BIG ROTATION (Trump-effect)

Especially Industrials and Financials got a boost since Wednesday, 9th Nov. 2016, post-Trump-election day. On the other hand NASDAQ-100- and Consumer-Staples- stocks took a hit since then:

The BIG Rotation (XLP, XLF, XLI versus NDX, DJIA), Nov. 2016

Furthermore, the Small-Caps-Stocks-Index, the Russell 2000 (RUT) strongly outperformed the standard broad-market Indices like the S&P 500 (SPX) and the Nasdaq-100 (NDX) in recent days, as can be seen in the following chart (Status "today": market-close Friday, 11th Nov. 2016):

Small-cap shares had the biggest single-day rally over the larger peers in ...

Minimum Vola-Strategien
(Zertifikate, ETFs, etc.)

"Wenn die Jagd nach Sicherheit in die Performance-Falle führt"; Low Vola-Fonds und -Zertifikate, die ausschließlich in Aktien mit niedriger Schwankungsbreite investieren, sind so beliebt wie nie zuvor. Gleiches gilt für einzelne Aktien, die...

Fondsvermögen - Entwicklung von Low Volatility-Strategien (Status: 2016)

...in der Vergangenheit relativ konstante Aufwärtstrends vorweisen konnten. Der Clou dabei: In den letzten Jahren haben diese Aktien auch noch besser performt als der Aktienmarkt insgesamt.

Geringere Schwankungen bei höherer Rendite also. Ein Anlegertraum ist wahrgenommen und immer noch mehr ...

Magic-Stock-Portfolio (2004 - Sep. 2016)

What does the Private Investor want? S/he wants the Professional to know/understand the risk-tolerance of the potential investor. The Professional should help the Private Investor to minimise the risk AND to MAXIMISE the return - as far as possible.

Magic-Stock-Portfolio (2004 - Sep. 2016), rG

The portfolio ("Portfolio 1") displayed and backtested is made up of 15 USD-stocks (incl. one "China"-ADR-Stock), but excluding new highflyers like Facebook, Alibaba or Mastercard, etc. due to their relative young history on the stockmarket (IPO after the year 2004!). In order to have a buffer to ...

Warren Buffet vs. Indices, ETFs

Ever looked at ETFs? Ever looked at the possible advantages and negative points of ETF-Investments? Well, additionally also take a look at the historical performance of Warren Buffet and how he did versus Indices & ETFs:

Warren Buffet vs. Indices, ETFs (chart since 2001), created by Ralph Gollner Oct. 2016

There has been a long fight between the proponents of Active Asset-Management versus Passive Investing via Index-products like ETFs. The main argument for the latter may be the low expenses versus the high Total-expenses which might occur if one buys an actively managed Investment-fund.

It gets even worse if the actively managed ...

Has Warren Buffet Lost His Appetite?

2015 has proved to be one of those rare years that Warren Buffett’s Berkshire Hathaway (BRK.A) has badly lagged the market. Berkshire H. finished the year 12% down. There stands the question: Is Warren Buffett losing his mojo?

Berkshire Hathaway (Warren Buffet - losing his mojo?), Status: Oct. 2016

Efficient Market Hypothesis: Warren Buffett’s investment style has mainly focused on value picks of companies with sizable moats that makes it difficult for them to succumb to competition. But it appears as if the moats surrounding some of his companies are drying up and the walls being breached.

A good case in point is IBM, ...

Correlation between stocks

Investors want to minimize the risk associated with a given expected return. Diversification can play a role by minimizing firm-specific risks. Example: Nike and Disney had a fabulous run from 2009 up to Aug. 2015 - but then something happend:

Correlation between stocks (NKE, DIS), 2009 - 10/2016

When you add new assets to your portfolio, you are adding the possibility that they will do well during the times your existing assets perform poorly, and vice versa. So without changing your expected return, you are able to lower the variability of returns. In fact, through careful selection of assets to add to your ...

David Blood, Al Gore
Generation Foundation

Definition of Sustainable Capitalism: Sustainable Capitalism is an economic system within which business and capital seek to maximise long-term value creation, accounting for all material ESG (environmental, social and governance) metrics.

Path towards Sustainable Capitalism

Integral to this framework is the consideration of all costs and benefits, regardless of whether they are currently attributed with an economic "price tag" by society. While this framework is designed with a long-term horizon, it also has meaningful short-term implications, providing a process for ...

DAX vs. 7 Aktien - Experiment/Backtest
03/2009 - 09/2016

Hätte man sich im März 2009 entscheiden, einige deutsche Aktien in sein Portfolio zu packen, wie hätte sich dieses (evtl.) entwickelt? Dieser hypothetischen Frage habe ich mir angenommen, welche Aktien man wohl gekauft hätte?

DAX-Outperformance Depot (Backtest/Experiment), 03/2009 - 09/2016

Im Zuge der /damaligen) Weltuntergangs-Stimmung hätte man wohl zu Aktien gegriffen, welche zumindest noch in 5 oder 10 Jahren für die globale Wirtschaft relevant "gewesen" wären, bzw. deren Dividendenrenditen oder Bilanzen einen zuversichtlichen Eindruck hinterlassen haben.

Wie gesagt geht es um den ...

Asset Allocation (Bsp. aus Juli 2016)

Folgend ein Schaubild der Asset-Allocation einer recht bekannten deutschen Vermögensverwaltung (Stichtag: 31. Juli 2016). In der Asset-Allocation anbei wird im Aktienanteil von ca. 59% in 38 verschiedene Aktien direkt investiert.

Gewichte_je_Anlageklasse_2008_2016Sep_quelle_Flossbach_von_Storch.png (591×433)

Die eher defensive Ausrichtung der Aktieninvestments kann daran abgelesen weren, dass sich ca. 24% der Aktieninvestments im nicht zyklischen Konsum befinden, weitere 22% im zyklischen Konsumbereich, somit ca. 46% des Aktienanteils in der Konsumbranche. Summa summarum sind ca. 27% des vermögensverwaltenden Fonds in der ...

The Timing-Portfolio - Strategy
from Jan. 1996 - Aug. 2016

There is the story, that timing does not pay off for the average. Well, for the average - yes, maybe NOT...But: for people who know how to handle the Ups & Downs of the Market (Mr. Market) that story may just be a nice fairytale.

Timing-Portfolio "Great Outperformance", R. Gollner (tool used: portfoliovisualizer.com)

And I don't believe in fairytales anymore, since I passed elementary school. Being extremely interested in the mechanics of the financial-markets, the moods of Mr. Market and the strange moves the Stock-Indices and Commodity-Markets can make, I experimented quite some time on how to establish a sound ...

AFA statt FANG
("da waren's nur noch 3")

Das glorreiche Trio am Aktienmarkt war in den letzten Jahren eindeutig Amazon, Facebook und Google/Alphabet. Kurzfristig durfte das eine Unternehmen immer wieder durchschnauffen, während die beiden Anderen durchstarteten.

AFA (the "new" FANG), Ralph Gollner (Sep. 2016)


Im obigen Chart/Kursverlauf (indexiert ab Mai/Juni 2012) habe ich die 3 Aktien jeweils zu einem Drittel gewichtet, wobei ich eine Aktie stärker gewichtet habe, als die Anderen (34% versus 33% vs. 33%). Zusätzlich wurde das "System" jedes Jahr wieder "rebalanced" - soll heissen: Auch wenn eine Aktie extrem gut performte, per ...

Hedge Fund (Paul Tudor Jones)
"tough times"

Paul Tudor Jones, who's facing his worst performance since the global financial crisis, wants to show investors he hasn’t lost his mojo.

Paul Tudor Jones (Returns 2001 - Aug. 2016)

Jones, the legendary macro trader, told investors in an Aug. 16, 2016-letter that he will manage a larger chunk of their money himself.

"We have to think outside the box," Jones, 61, said in the letter obtained by Bloomberg. "I firmly believe the changes we have made put us in a position to be successful even in this desultory macro environment."

Tudor, which Jones founded in 1980, hasn’t in recent years ...

George Soros & Carl Icahn
Old men, but still fit (?)

Carl Icahn turns apocalyptic: "I Am More Hedged Than Ever, A Day Of Reckoning Is Coming". George Soros: The 86-year-old’s fund disclosed in a regulatory filing it had increased its bet against the S&P 500,...

Soros Fund Management (PUT-Portfolio, June 2016)

...the main index used to measure big-stock performance in the U.S., reporting "PUT" options on millions of shares as of 30th June 2016 in exchange-traded funds that tracks the indices. That"s up from "puts" on 2.1 million shares as of 31st March 2016.

Snapshot / Portfolio Holdings of George Soros at Soros Fund Management LLC ...

BOFA Fund Manager Survey (Aug. 2016)
Cash levels coming down from a 15-year high

Investors are still hoarding cash according to Bank of America Merrill Lynch’s survey of fund managers published 16th Aug. 2016. According to the survey, cash levels dropped to 5.4% from 5.8% last month,...

BOFA Fund Manager Survey (Aug. 2016), Cash levels

...but were still at the highest levels since 2001. An overall total of 211 participants, with assets under management of $628 billion, took part in the survey, taken Aug. 5-11, 2016.

Still, fewer fund managers are trying to hedge against a sharp fall in equity markets in the next three months. They ...

Anlagestrategien (Schwankungen "6 Monate")

Sie müssen wissen, wie viel Volatilität Sie vertragen können, und Ihr Portfolio entsprechend anpassen. John Maynard Keynes konnte große Schwankungen aushalten, vor allem weil er seiner Aktienauswahl dauerhaft vertraute.

Anlagestrategien rG (02/2016 - 08/2016)

Nur wenige Menschen wissen, wie erfolgreich Keynes als Anleger war. Tatsächlich war er einer der größten Anleger des 20. Jahrhunderts, wenn man bedenkt, dass die Zeit, in der er sein Geld anlegte, zwei Weltkriege und die Große Depression umfasste.

Anders als die der meisten anderen großen Volkswirte war Keynes' Weltsicht von ...

AbsoluteReturn-Ansatz versus Ray Dalio
Bridgewater All Weather @12% Trading Ltd

Ray Dalio's Bridgewater Associates has USD 155 billion in assets under management and counts the World Bank among its investors. He's advised various U.S. treasury chiefs including, Tim Geithner and Larry Summers.

AbsoluteReturn-Ansatz vs. Ray Dalio (Bridgewater All Weather)

However, Bridgewater's All Weather portfolio, a long-only fund designed to hold a well-diversified asset mix, ended 2015 down 7 percent. "All Weather ... is a portfolio in which the assets are supposed to balance each other," Dalio said. "[But] the problem last year (2015) is that almost all asset ...

Ray Dalio versus ZUKAL und W. Buffet
(Dez. 2014 bis Juni 2016)

Man sollte sich eine Benchmark zurechtlegen, die sich mal von den Standardbenchmarks abhebt. Ich habe hierzu Ray Dalio's Anlegevehikel und Warren Buffet mit seiner Berkshire Hathaway-Aktie gewählt; mehr zu Ray Dalio weiter unten:

ZUKAL vs. Ray Dalio vs. Warren Buffet (Dez. 2014 - Juni 2016)

Die Wiege der Revolution steht in den Wäldern Conneticuts. Einige Kilometer außerhalb des Städtchens Westport hat Ray Dalio eine neue Methode entwickelt, das Geld seiner Kunden so auf Aktien, Anleihen und Rohstoffe zu verteilen, dass es in jedem Wirtschaftsumfeld wächst. Der 66-jährige ist so ...

Ralph Gollner vs. BC-Zertifikat
(Drawdownphasen 2000-5/2016)

An der Börse besitzt die Qualität der Defensive eine große Bedeutung. Im Vergleich mit dem "BC-Zertifikat" und des Ralph Gollner-Backtest "Portfolio 1" kann dies anhand von sogenannten Drawdown-Charts ausführlich erläutert werden:

BC-Zertifikat vs. Dow Jones (2000-2016)

Die Diagramme bringen zum Ausdruck, wie viel der Kurs seit dem bisherigen All-Time-High nachgegeben hat, was Börsianer als Drawdown bezeichnen.

BC-Zertifikat, und insbesondere Ralph Gollner-Backtest "Portfolio 1"
im Drawdown-Vergleich auf der "Siegerstraße"

Betrachten wir heute den Drawdown-Chart ...

Buy & Hold-Strategie (Ralph Gollner)
(Juni 2014 bis Juni 2016)

Folgend ein Backtest einer Buy & Hold-Strategie. Gestartet wurde der Test im Jahr 2001. Hier ein Ausschitt mit einem am Markt erhältlichen Zertifikat (BC-Zertifikat) als Vergleich. Portfolio aus den 15 gleichen USD-Aktien:

Superportfolio (Ralph Gollner) vs. BC-Zerti, Backtest (05/2016)

Exklusive Fremdwährungsbewegungen erreichte das Buy & Hold-Portfolio in 2014 eine Jahresrendite von ca. 17%, im Jahr 2015 erreichte das Portfolio (exkl. FX-Impact) ca. 27% Plus. Wenn man nun auch die EUR/USD-Bewegung seit Juni 2014 miteinberechnet, hat sich das Portfolio im Zeitraum Juni 2014 bis April ...

Buy & Hold Skyrocket-Portfolio
1992 - 05/2016

13 stocks may be enough to enjoy such a great - risk-reduced - outperformance over most of the benchmarks out there. Not to say: Against all benchmarks out there! YES :-). Don't forget: This Buy & Hold Strategy started in 1992!

Buy & Hold Skyrocket-Portfolio (1992-05/2016)

Great Portfolio 1
(2001-05/2016, CAGR: >24% p.a.)

We Austrians and Germans hopefully are not infected by the dangerous HOME-BIAS! It may not kill your outperformance, but may dampen your performance in the short-run, and definitely also in the long-run ("recessions")!

Portfolio 1 Great Return(s), Ralph Gollner

You have to search, you have to recheck the correlations between the stocks, you should diversify between the different sectors, then you should be able to achieve a constant outperformance versus the broad US-Stock Market:

Since 2001 this portfolio has been put together (unfortunatelly only ex-post via backtesting ...

Top 100 BrandZ 2015 (Performance Recap)
June 2015 - 9th June 2016

Selected companies out of the Top 100 BrandZ list, which has been published in May 2015. Relative to the S&P 500 (broad US-Stock-Market, "black mountain") one can clearly see an outperformance of a basket of 15 stocks:

Selected Top BrandZ 2015 Portfolio (Status: 10th June 2016)1year/retrospective, updated: http://bigcharts.marketwatch.com

Following you will find an overview of some TOP BrandZ of the TOP100-list issued by Millward Brown and WPP. In the following selection Micrsoft, Visa, AT&T and Verizon were gaining places in the overall-ranking. This also had an impact regarding ...

Umfrage unter österr. Vermögenden (Asset Allocation)
LGT Private Private Banking Report 2015

Die Finanzkrise 2007/2008 war für viele Anleger eine einschneidende Zäsur. So zeichnete der erste LGT Private Banking Report aus dem Jahr 2010 das Bild verunsicherter Bankkunden, die das Vertrauen...

LGT-Umfrage (jku 2014, Vergleich mit 2012 und 2014)Anmerkung: Grafik von Mag. R. Gollner erstellt. Basis sind die Umfragedaten vermögender Anleger aus Österreich. Umfragen wurden durchgeführt von jku und gfk im Auftrag der LGT Bank.

...in die Stabilität des Finanzsystems verloren hatten. Viele Vermögende hatten ihre Portfolios in weniger ...

S&P 400 Total Return (great Index)

MidCap-stocks usually outperform in the long run. The academic answer is that smaller companies are riskier and therefore command a higher risk premium (aka trade at a discount to 'safer' large cap stocks).

Risk & Return (1986-2015)

The chart above shows the risk and return of various asset classes over the past 30 years. The performance shown includes reinvestment of any income or distributions. Large-cap stocks are represented by the S&P 500 index. Midcap stocks are represented by the S&P MidCap 400 index. Small-cap stocks are represented by a composite of the CRSP 6th-10th ...

AAII lifetime-investment-strategy (May 2016)

I put togehter some abstracts of a longer text, originally written by James B. Cloonan (Chairmain of AAII).

At the end of this article you should see or you should be able to understand:
that for the long-term portion of invested wealth, stock investing offers an outstanding opportunity for wealth accumulation through growth at relatively low risk. It should be emphasized that the stock market is risky for short-term holding periods, but as an investor's time frame goes beyond five years (10 years, 20 years), this risk is greatly diminished. It should also be emphasized that an expected ...

Momentum Strategy (strong sectors/stocks)

The momentum factor is based on the price change of a stock over a specified period relative to all other stocks. It is considered to be an anomaly or a risk factor in the analysis of stock returns because...

Momentum strategy (Value, Momentum, Combo)

The chart above, taken from the paper entitled “Value and Momentum Everywhere” (Clifford Asness, Tobias Moskowitz, and Lasse Pedersen), compares cumulative returns and annualized Sharpe ratios (SR) for a value strategy, a momentum strategy and a 50-50 value-momentum strategy (rebalanced monthly) as applied to an equal-weighted combination ...

Warren Buffet vs S&P 500-ETF vs Hedge Funds
Jan. 2008 - Dec. 2015

Buffett’s Big Bet ("The Bet") took the view that high fees would ultimately doom hedge funds to underperform the S&P 500 over long periods of time. As he described it at the Bet’s inception:

A Long Bet: Warren Buffet versus Hedge Funds

Costs skyrocket when large annual fees, large performance fees, and active trading costs are all added to the active investor’s equation. Funds of hedge funds accentuate this cost problem because their fees are superimposed on the large fees charged by the hedge funds in which the funds of funds are invested.

A number of smart ...

John Paulson (Berühmter Hedge-Fonds Manager)
Gründung seiner Ges. im Jahr: 1994

Etliche Hedge-Fonds existieren nun seit mehr als 10 Jahren. Eine dieser Investmentgesellschaften wurde im Jahr 1994 mit einem Startkapital von USD 2 Mio. von John Paulson gegründet: Paulson & Co.

J. Paulson versus S&P 500 (2012-04/2016), source: tipranks.comIm Vergleich mit dem marktbreiten US-Aktienindex S&P 500 im 4-Jahresvergleich ein Verlierer

Die Euro am Sonntag per 04/2016 betitelt einen aktuellen Artikel zu John Paulson eher negativ: "Gewinner im Verlierermodus".

Hedgefondsmanager wie der US-Milliardär John Paulson haben in den letzten Monaten viel Geld und ...

Intermarket (Snapshot/verschiedene Assets)

Die Intermarketanalyse ist eine vergleichsweise junge Disziplin innerhalb der technischen Analyse. Ich werfe hier einen Blick auf den DAX u. den S&P 500 (Aktienindizes), Öl, GOLD, sowie EUR/USD & USD/JPY (FX):

Intermarkt-Analyse (Snapshot DAX April 2016, 10.000 Punkt); Mag. Ralph Gollner"magische 10.000-Punkte-Marke als MOB-Marke" (im obigen Chart)

Man sagt, die US-Märkte sind immer das Zugpferd für globale Aktienmärkte, somit folgend der S&P 500:

Stunning: Im Jan./Feb. 2016 hatte der Ölpreis eine kfr. (!) starke pos. Korrelation mit den Aktienmärkten:

Folgend dem Tohuwabohu zwischen dem Ölpreis und den (Anfang 2016) ...

Minimum Varianz ("Portfolio 1"), 1996-03/2016
Backtest

In diesem Beispiel-Portfolio (genannt "Portfolio 1") will ich ein sogenanntes Minimum-Varianz Portfolio darstellen. Dazu bediene ich mir einfacher Bausteine; Somit kann auch der Newbie was mit der Zusammenstellung anfangen.

Minimum Varianz PF (Bsp.), rG; 2010 - 03/2016Der Einfachheit halber habe ich 10 US-Aktien ausgewählt, dazu 7% Internationale Aktien, 7% Emerging-Markets-Aktien, 7% US-Staatsanleihen und als Sicherheitsinstrument 7% Gold - voilà fertig ist der Anlagecocktail. Die Performance seit Jan. 2010 ist doch sehr gut!

Vorher will ich jedoch auf die Gesamtperformance ...

Dividend payers - Portfolio (Backtest 1996 - 2015)

If you want to build your own portfolio of selected US-stocks, you may want to focus on dividend-paying stocks in order to reduce the overall-risk! C-Average-Growth per year of this sample: 12.59% p.a. (10.18% per year after inflation)

Example Portfolio (Ralph Gollner sample, 1996 - 2015)
What could this mean to the Newbie in the Invesment world? To put this into perspective: Due to various reasons investors may only want to hold on to their initial portfolio (same stocks) or part of their holdings for a certain time period. Due to external influences (private circumstances; e.g. expensive ...

Entscheidungsfindung/Asset-Allocation
(Branchenmix, Investitions-quote)

Entscheidungen treffen ist das A&O, nicht nur bei der Geldanlage. Erkenntnisse zu Methoden und Instrumenten für bessere Entscheidungsfindung sind regelmäßig Cover- und Schwerpunktthemen der "Harvard Business Review".

möglicher Branchenmix eines Aktiendepots (2015, rG)

Wissenschaftler wie Nobelpeisträger Daniel Kahneman und Gerd Gigerenzer, Direktor am Max-Planck-Institut für Bildungsforschung in Berlin, haben Entscheidungsmechanismen und ihre Tücken aus pychologischer Perspektive analysiert. Der Beststellerautor Nassim Nicholas Taleb ("Der Schwarze Schwan") hat ...

Asset Allocation (annual performance/2003-2015)

Minimal gains make 2015 the worst year for finding returns since 1937, when the cash-like 3-month Treasury bill beat out other major asset classes with a return of 0.3 percent, see also Div. Portfolio-reading below:

Asset Class Returns 2003-2015 (source: BlackRock)Source: Informa Investment Solutions. Past performance is no guarantee of future results. The information provided is for illustrative purposes and is not meant to represent the performance of any particular investment. Assumes reinvestment of all distributions. It is not possible to directly invest in an index. Diversification ...

Asset Allocation (minimum loss year 1 out of 25)
investment period: 1975-1999

A sound investment strategy starts with an asset allocation suitable for the portfolio's objective (following example shows a LOWER-Risk/High-Return Asset Mix and its performance in the Goldilocks-period 1975-1999):

Asset Allocation (1975-1999)

The allocation should be built upon reasonable expectations for risk and returns, and should use diversified investments to avoid exposure to unnecessary risks.

Both asset allocation and diversification are rooted in the idea of balance. Because all investments involve risk, investors must manage ...

Portfolio-Example (what is possible?)
Period: 1996-2016

Before building a portfolio, one needs to know about ones investment-horizon. I would suggest 20 or even 30 years, anything below 3 (or 5) years may be very risky...Patience should be highly rewarded, as can be seen in this example:

8stock-portfolio-risky_but_longlasting_OUTPERFORMER

I am not handing out the names of each component of this (example-)portfolio, but it should be noted, that the weighting of each stock over the lifetime was fixed and the same for the entire portfolio in 2016, simililar as in the year 1999, 2004, 2007 or 2012, etc. The portfolio will be tested again ...

Decade Returns 1930 through 2009

Arguably the most important decision is choosing what kinds of things to invest in. Asset class selection is the name for this. As you can see, from 1930 through 2013, some of the different asset classes were substantially more rewarding than others:

source: Dimensional Fund Advisorssource: http://www.marketwatch.com

In the stock market, you can invest in popular growth stocks or unloved value stocks. You can invest in big companies (large-cap) or small companies (small-cap). You can invest in U.S. stocks or in international stocks; you can also invest in emerging markets stocks and ...

Asset Allocation (annual performance/history)

Good old times, when men & women did not have to think, or let's say: They just had to think BIG (Large Cap Stocks). Easier to buy, what's known and even better: IT/Growth stocks (whatsoever).

Annual Return (Asset classes 1994 - 2002)data: https://www.franklintempleton.com

Everything was rising between 1995 and 1999. The best fund-manager was either a monkey or a donkey (you can choose ; -).

Related Articles

Assess

Evaluate

Take action

Follow your rules

Adapt your strategy if needed (before it's too late)

Always remember: Sometimes there is NO 2nd chance !!

"Lower Risk" - Strategy/Minimum Effort - Defensive Grade Stocks

Benjamin Graham was an economist and professional investor who taught Warren Buffett, Irving Kahn, Walter J. Schloss and other famous investors at Columbia Business School.

Graham Formula (Defensive Investor)
The first grade of stocks recommended by Graham are called ...

Dow Jones Ind. Average (Risk-Scenario Q1-2016)

There is some risk in the market - especially after the strong Chinese headwind on the awakening of the 1st trading-day in the year 2016. In the S&P 500 the support-level of ca. 1,990 has to hold as well as in the GERMAN DAX @ ca. 10,120!

Dow Jones Industrial Average Risk Scenario Q1-2016 (RG)

...

LTCM - Debacle (1998)
Long-Term Capital Management

Reared on Merton's and Schole's teachings of efficient markets, the professors actually believed that prices would go and go directly where the models said they should. The professors' conceit was to think that models could forecast...

LTCM - performance and debacle in 1998
... the ...

DAX Y2K vs. Brexit/Bremain-Factor
(23. Juni 2016 / 24. Juni 2016)

Eine "binäre Option kommt auf uns zu"; Entweder 1 ("sie bleiben drinnen"), oder 0 (= BREXIT). Folgend diesem unsicheren Ausgang, bzw. unsicheren Folgetagen für den DAX ein Blick zurück auf die Milleniumswende:

DAX Y2K vs. BREXIT/BREMAIN-Factor (-8%)

Man kann somit ...

BREXIT-voting - outcome for stocks
(24th June 2016)

A small selection of S&P 500 stocks, which had a pretty bad day in the TECH-Sector of the S&P 500, the broad US-Stock Market Index. Following the unexpected BREXIT (British people voting for a drop-out of the EU) the stock-market crashed:

...

Black Swans, Grey Swans, and White Swans
Brexit (Grey Swan)

Life is full of surprises. Good and bad. We all know that. What we learn over time is that a few of those surprises have sculptured the bodies of our lives. The whole world evolves through large incremental random changes!

Black Swan, Grey Swan, White Swan (Definition) ...

KEEP CALM AND CARRY ON

„Keep calm and carry on“ – „Ruhe bewahren und weiter machen“… erst mal durchatmen und dann gehts weiter. Es gibt so viele Situationen in denen „Keep calm and carry on“ der Spruch der Wahl ist und gerade scheint er auch wirklich angesagt zu sein.
Keep Calm and Carry OnÜberall springt es uns ...

The oldest bank in the world...

Brexit rückt Italiens Bankensystem und dessen NPLs ins Zentrum; NPLs - also "Non-Performing-Loans" sind ein großes Problem für das italienische Bankensystem, dessen chronische Schwäche nunmehr dank des Brexit-Voting wieder an die Oberfläche gelangt.

Banca Monte dei Paschi die Siena (longterm Chart)

Ich war ...

Alles wird gut (HOFFENTLICH!)
NPL-Italy

Der gesamte italienische Bankensektor hat 360 Milliarden Euro an Krediten in seinen Büchern, davon dürften 18 Prozent faul sein. Krachen die italienischen Banken, so könnte das eine Kettenreaktion auslösen.

Denn laut der Bank für Internationalen ...

What's your risk number?
"Risk Tolerance"

Do you really know how much you can afford to lose in the market (in German aka: "Rumrutschfaktor")? The Portfolio-management process starts with you setting an acceptable range of outcomes, be it in percentage or absolute terms (in EUR, USD, etc.).

S&P 500 Drawdowns (2008 - 2015)
...

Black Swan/2008 Market Crash
Diversification

If 2008-09 teaches us anything, it’s the truth in the old adage: "The only thing that goes up in a market crash is correlation." Diversification is overrated, especially when we need it most.

Black Swan/2008 Market Crash (Diversification/Correlation)

In the asset allocation work for North American ...

S&P 500 Verlustwahrscheinlichkeit / Anlagehorizont
(Historie 1960 - 2015)

In der Praxis werde der Anlagehorizont oft zu kurz gewählt, was zu einem suboptimal kleinen Aktienanteil führe (Quelle: Emch, Urs; Renz, Hugo; Arpagaus, Reto (Hrsg.) (2011): Das...

S&P 500 Verlustwahrscheinlichkeit / Anlagehorizont

...Schweizerische Bankgeschäft . 7. ...

Be careful in your "1st years"

According to the U.S. market research group Dalbar, which publishes the Quantitative Analysis of Investor Behavior study, the Standard & Poor's has managed an annualized return of over 10% over the past 30 years,...

Don´t lose (too much) in the first years!...far outstripping inflation, which has ...

Elliott-Wellen
Textpassagen aus Original von André Tiedje und Einführungsvideo

Die sogenannten Elliott-Wellen tragen den Namen ihres Erfinders bzw. der Person, die sie entdeckt hat. Und diese Person war der US-Amerikaner Ralph Nelson Elliott, der von 1871 bis 1948 lebte.

Elliott Wellen (TD-Dream), Beispiel-Chart

Ausgangspunkt für ...

Artificial Inteligence Trading-System

Focusing on powerful algorithms and modelling techniques allows one to extract the most information from ones data ("BIG DATA") and find correlations, using regressions and Backtesting. Here explanations on AI and 2 highly profitable FX-systems.

Artificial Inteligence (Trading-System), Machine Learning, Data Mining

...

Travis Rice (Pro Snowboarder) on RISK

Travis is known for being the best snowboarder in the world. But what makes him really special is that he is an innovator, a risk taker, a visionary, the star of the most progressive action sports film ever made (The Art of Flight).

Quote: "[You] should ...

Probabilites for success (> 69% ?)

Warren Buffet was lucky *g* He was born with the ability to THINK LONGTERM ! As an example I am showing following 10years-periods to show the probability to achieve positive yearly gains, while only following a Stock-Index:

Annual returns (10year-periods, DAX, S&P 500), Status: year 2016

After having checked that the ...

Risk from Election day until Inauguration day
(Dow Jones in the upcoming period: 9th Nov. 2016 - 20th Jan. 2017)

Dow Jones Industrial Average Closing was at ca. 18,333 points on the election-day (8th Nov. 2016). If we had to experience a minus 6%-move like we did from Nov. 2000 - Jan. 2001...

Risk from Election day until Inauguration day (Nov. 2016 - Feb. 2017) ...

The Mouse, The Helmet & The Cheese
(Risk-Taking)

Take intelligent risks (Mouse, Cheese & HELMET)

Drawdowns (20year-period)

Don't be afraid, it's only a "Drawdown"..."what draws down, goes up again (hopefully)"
I made some Monte-Carlo-Simulation runs and put up some Drawdown-Scenarios, but let´s start with the S&P 500:

Drawdowns (20year-period), S&P 500, etc. (Status: Dec. 2016)

 

a) Based on Statistical Returns (Allocation-Mix: US Stock Market ...

Diversification (Number of stocks)

Investment theory, and intuition, tell us that risk is reduced by diversification - not putting everything in one basket by holding more than one stock. The question naturally arises: how many stocks should one hold?

Diversification (number of stocks and Volatility Reduction)

What diversification can and cannot ...

Warum haben Anleger Angst vor Aktien,
einem Aktienkorb und der Börse generell?

Im Jan./Feb. 2016 ging es mit dem MSCI-World-Index um 17% und mit dem DAX um 19% bergab. Rechnerisch lässt sich die Robustheit eines Portfolios durch den Maximum Drawdown darstellen. Er gibt an,...

Maximum Drawdown - wichtige Anlageklassen im Jahr 2016

...welchen ...

"Kindergartenbörse"
(Max. Drawdown S&P 500; 06/2012 - 07/2015)

Maximaler Drawdown (Max. Wertverlust) bezeichnet den stärksten Wertrückgang, den ein Fonds oder Index während eines bestimmten Zeitraums verzeichnete. Dazu werden gleitende Zeiträume gemessen,...

"Kindergartenbörse", S&P 500 between June 2012 and July 2015

...d.h. der maximale Verlust wird ...

Dynamische Komplexität, Entscheidungen unter Risiko

Es ist für uns Alle eine Herausforderung, mit den Risiken in einer (dynamischen) komplexen Welt effektiv umzugehen. Diese dynamische, komplexe Welt wird von Fachleuten in den USA mit dem Akronym VUCA gekennzeichnet.

VUKA positiv (Spielerisch "damit" umgehen)

VUCA (deutsch: VUKA) ...

TEMPORARY Market losses are the one constant that...
...don't change over time - get used to it !

"One needs to show" what the distributions of stock returns are over time. This paraphrased recommendation was given by University of Chicago professor Eugene Fama at a CFA...

...Chicago Society ...

40 stocks & Diversification

Can/Do you sufficiently spread out your risk by holding a large number of different securities across sectors, industries, and companies? This spreading out of risk, or diversification, is one of the basic...

40 stocks - chance of losing money in a given year WITH positive Benchmark-Returns (ca. +6% benchmark)

This example above shows the mathematical probability ...

DAX, Dow Jones (Rücksetzer, "Drawdowns")

Seit dem inoffiziellen Start von meinem Projekt "Black Swan" im Sommer/Juli 2014 herum legten Dax und Dow Jones um +25,1% sowie +29,5% zu (Status: 8. Sep. 2017). Dazwischen, seit 1. Juli 2014, kam es in beiden Aktienindizes zu Korrekturen.

Dow Jones Drawdowns (Juli 2014 - 8. Sep. 2017)

Beim Dow ...

DAX im Okt. 2017 (& Q4-2017)
Q1-2018 (auch eingezeichnet)

Sofern der DAX im Okt. nicht extrem abschmiert, könnte es tatsächlich einen schönen Jahresausklang geben - SOFERN die 11.825 Punkte im DAX Performanceindex halten (sofern kfr. Absturz?). Zugegeben: 6% Plus oder...

DAX im Okt. 2017 (Q4-2017), Mögliche Möglichkeiten und Unmögliches (Status: 21. Sep. 2017)


... Minus im Monat ...