Hedge funds raise capital largely from institutional investors. Small individual investors may feel left out but probably do not realize what a blessing that really is. Simple strategies way within their reach have outperformed hedge funds in terms of return and risk-adjusted return over the...

Factor investing has received much attention from academics and practitioners, as well as from individual and institutional investors. It has become usual for investors that aim to enhance returns to add to the core of their portfolios a factor satellite, thus tilting their portfolios toward...

Individual investors typically determine their asset allocation using investor questionnaires, which can be viewed as black boxes that generate a result without highlighting the benefits and costs of the portfolios considered. This article introduces an asset allocation tool, the gain-pain index...

The most important financial issue retirees have to deal with is whether their strategy will be able to sustain all the withdrawals they expect to make in retirement, as well as a bequest they aim to leave. For this reason, it is critical to periodically monitor the evolution of a financial plan...

Volatility is the most widely-used measure of risk but its relevance is questionable in many settings. For long-term investors, short-term volatility is something they just have to live with and disregard as much as possible. Tail risks, however, are critical because, although rare by...

Beta has been a controversial measure of risk ever since it was proposed almost half a century ago, and we do not pretend to settle with this article what decades of research has not. We do, however, take advantage of the recent trend of investing in countries and industries through index funds...

This note, which complements the note quot;The Pricing of Internet Stocksquot; (FN-467-E), addresses two main issues: 1) Reverse valuation and 2) expected values and scenarios. Both valuation models are briefly analyzed and applied to the valuation of Yahoo, the leading Internet portal and one...

SUBJECT AREAS: Internet stocks. Stock pricing.The technical note recreates a report written by a consultant to his clients which does not attempt to justify the valuation of Internet stocks; rather, it attempts to be a map to guide unaware investors through the quot;madnessquot; of assessing the...

Retirement planning is an issue that must be tackled early and solved backward. It must be tackled early because with a few working years to go there is little that can be done if an individual is not on the right path; and it must be solved backward because it makes little sense to aim for a...

P/E ratios are one of the tools most widely-used by analysts and the key variable in many value strategies. PEG ratios, an increasingly-popular valuation tool among analysts, improve upon P/E ratios by adjusting the latter by growth. This article proposes a new tool, the PERG ratio, that adjusts...