Your Special Diversification
September 28th 2006 12:54
In the classic investment text of Modern Portfolio Theory, pioneered by Harry Markowitz, who proposed that investors are rational and will pick the portfolio with least risk. Therefore in theory investors are generally risk adverse and rational, but as we all know that the reality is contradicting more than half the time. Nonetheless, investors are generally observed as risk adverse but in terms of rationality, it becomes another story.
In Markowitz's classic text, an optimal portfolio is a combination of all possible assets in the efficient frontier, to generate the best return with the least amount of risk. It should be noted that the assets described do not necessary mean equities or financial assets but all types of assets such as property to antiques. The portfolio mechanics work on the basis that assets combination should not be perfectly correlated in order to reduce individual asset risk. For instance, assuming all the assets's value will fall during bad times, the portfolio returns will suffer fully as a result. Howeverm, if only half of the assets are affected during bad times, only half of the portfolio returns will be halved or negatively affected. Hence; diversification and in simple words; don't put all your eggs in one basket. A wise mantra time will not defeat.
Yet, when speaking of diversification, assets such as property, foreign currencies, foreign equities, derivatives, gold or even art collections pop up but the limit does not end here. Alternative assets such as antiques are value safe assets which only the rich are able to acquire and safely lock it away in a tight vault. Look no further as with the advent of modern technology, acquiring antiques need not be at Sotheby's or Christie's but just some clicks away. For a special period, Benkaiser.NET is auctioning on eBay, an antique Chinese coin, belonging to the Qing Dynasty era of the Emperor Guangxu reign (1875 - 1908). A chance for you to acquire an asset with deep story and history not available everyday. Start your alternative diversification today. To diversify is to protect. Remember, fail to plan is plan to fail.
Click Qing Dynasty Coin, Emperor Guangxu Reign (1875 - 1908), for more details. Starting bid at USD 0.99.
As resource prices went north, the market headed up likewise with the ASX S&P 200 benchmark index gaining 0.4%, as the market went hunting for stocks went unloved in the past such as Brambles and Rinker. The Portfolio 1.5 - EW set up by Benkaiser.NET had a good day as well with an increase of 1.87% to 11.30% in value terms. Unrealised profit, after first round transaction cost, is currently standing at $3,831.
In Markowitz's classic text, an optimal portfolio is a combination of all possible assets in the efficient frontier, to generate the best return with the least amount of risk. It should be noted that the assets described do not necessary mean equities or financial assets but all types of assets such as property to antiques. The portfolio mechanics work on the basis that assets combination should not be perfectly correlated in order to reduce individual asset risk. For instance, assuming all the assets's value will fall during bad times, the portfolio returns will suffer fully as a result. Howeverm, if only half of the assets are affected during bad times, only half of the portfolio returns will be halved or negatively affected. Hence; diversification and in simple words; don't put all your eggs in one basket. A wise mantra time will not defeat.
Yet, when speaking of diversification, assets such as property, foreign currencies, foreign equities, derivatives, gold or even art collections pop up but the limit does not end here. Alternative assets such as antiques are value safe assets which only the rich are able to acquire and safely lock it away in a tight vault. Look no further as with the advent of modern technology, acquiring antiques need not be at Sotheby's or Christie's but just some clicks away. For a special period, Benkaiser.NET is auctioning on eBay, an antique Chinese coin, belonging to the Qing Dynasty era of the Emperor Guangxu reign (1875 - 1908). A chance for you to acquire an asset with deep story and history not available everyday. Start your alternative diversification today. To diversify is to protect. Remember, fail to plan is plan to fail.
Click Qing Dynasty Coin, Emperor Guangxu Reign (1875 - 1908), for more details. Starting bid at USD 0.99.
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Market Wrap UpAs resource prices went north, the market headed up likewise with the ASX S&P 200 benchmark index gaining 0.4%, as the market went hunting for stocks went unloved in the past such as Brambles and Rinker. The Portfolio 1.5 - EW set up by Benkaiser.NET had a good day as well with an increase of 1.87% to 11.30% in value terms. Unrealised profit, after first round transaction cost, is currently standing at $3,831.
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