Investments
Please be advised that this information is NOT intended to tell which
stock or fund to buy. I have personally never found very many forms, analyses
or magazine articles (usually written by those who have NO licenses, designations
or background in the industry and have never read material from the Federal
Reserve Boards) very good in unilaterally determining what is the best investment
at any given point in time. It is far more essential to review what could
be good in the future- hence a major focus on everchanging economics.
Nonetheless, in order to focus on what might be good, it is absolutely necessary
to review what has happened in the past with certain stocks and markets.
Further, I absolutely feel that the
risk profiles (every magazine
and fund has one) do a disservice to consumers since, without adequate
insight, they lead consumers to do what they want or would
like to do, not what they NEED or
SHOULD do. That's a huge difference and leads many
people in the totally wrong direction. Sure, there are good articles; sure,
some articles might relate good basics on estate or retirement planning,
etc., but if you (and they) don't understand basis or diversification by
the numbers, many of the suggestions may only be 60% or 75% right. Unfortunately,
being 40% wrong represents failure on a test (and this is a LIFE
test). Even a 75% grade is hardly comforting. You don't want someone getting
just a passing grade in investments, planning or insurance to advise you.
ILLOGICAL!
That said, I do believe it is worthwhile to view a lot of
the various rating services, forms, magazine articles, etc. and compare their
selections, insights and suggestions to each other. Once in awhile, they
can dovetail in their recommendations and possibly give you a direction to
follow.
The following contains information from various articles and research
reports that I review constantly, statistics, analysis that I have done for
arbitrations and personal research, and commentary that I have used in
my newsletters, in
various seminars and classes and with
my own clients. Some of it is redundant from article to article and link
to link since, obviously, one needs to address risk, diversification and
other basic elements each and everytime. But you will find that they may
be treated differently or more extensively depending on what I am trying
to get across and you can learn something from each one.
One main point is this: no matter who or what else you read, one
of the key elements for good investing is to stay on top of current and projected
economics. Whether in your initial purchase, rebalancing or on a subsequent
sale, national and international economics should acknowledge a major part
of your decision. Yes, Newsweek, Business Week and others provide insight,
but I have provided a link below that can get you to all the Federal Reserve
Boards. True, some of it may be tough to understand initially (I don't understand
it all), but the attempt in trying will only make you better. I will repeat-
just because you don't understand something now does not mean you
can't. Just keep reading and asking questions and, sooner or later,
you can make sense out of the most detailed reports.
Lastly, if you are buying individual stocks....why? If you can do
the quiz below, maybe O.K. Otherwise, you probably aren't grounded in the
basics and are taking FAR too much risk. ( "Human beings cannot
pick stocks. Period." William J. Bernstein) As regards funds- which can be
more diversified- you need to consider the studies regarding asset allocation
and correlation. And NEVER buy a fund with a high expense ratio. Once
you understand these issues, you can look to reasonable success at appropriate
risk levels.
"Prices can be right yet every single investor could be making
the wrong choice."
Shlomo Benartzi, UCLA Accounting Professor
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this site as an Editor's Choice for Securities Information
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Nonsense Finance eBook
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THE 2003 INVESTOR'S ASSET ALLOCATION
GUIDE: Considering the amount of statistical info that has come out in
the past couple years, there needs to be a change in the traditional static
asset allocation mix- even the dynamic asset allocation mixes- primarily
because many have not worked. Here is commentary that addresses many issues.
My book contains a more concise format but this should help get you
started.
401(K) CALCULATOR
LINK: You can input all the numbers- salary reduction, employer
match, salary increase, etc. and various investment returns and get an immediate
calculation on the value of a 401(k) plan at retirement (or whenever). You
need to recognize however that if you understand basis, you may want to put
in only enough to get your matching contributions. Too much can be categorically
the wrong way to fund retirement.
403(B)-
TSA MAXIMUM EXCLUSION
ALLOWANCE LINK:
ACTIVE
VERSUS PASSIVE MANAGEMENT LINK: Clearly one of the most contentious issues
in the use of mutual funds is whether or not active management- with the
associated higher charges- can outproduce passive management via index funds.
This article by Sharpe provides some statistical evidence. Generally, I suggest
a passive approach- though not exclusively. One can look to Far East indexing
and the fact that Japan's recession almost completely obscured other country
returns. Hence something more active in eliminating that element would have
been better. But the issue is not necessarily indexing per se, but what index
to use. And that is determined by economics, not Morningstar stars nor the
Sharpe ratio.
ALLOCATION STANDARD
DEVIATION LINK: Excellent statistical material by TAM Asset
Management.
ALPHA
LINK: This data set lists annualized Jensen's alphas by industry, as
well as R-squared values.
AMERICAN ASSOCIATION OF INDIVIDUAL
INVESTORS (AAII) LINK: Good general comments, but I am not impressed
by other material. Their glossary does not address diversification, correlation,
Sharpe ratio or the other elements of fundamental investing. If you
don't have at least a working understanding of those issues, then a good
portion of your returns are inevitably due to luck, not analysis or skill.
Recognize that almost anything has worked during the last 10 years of this
stock market (an anomaly, I submit), but when the real world hits, you better
know how to do your homework. My point again- if you do not know who
BILL SHARPE is or
what the Sharpe Ratio represents, then you don't know crap about investing.
In such case, I'd also suggest you read "male ego" in my glossary.
AMERICAN DEPOSITORY RECEIPTS
LINK 1: (ADR) This site has a complete listing of International ADR's
plus compares performance of world's major indexes and more.
ANALYZING
HISTORICAL RETURNS LINK The outstanding performance of the stock market
during the past twenty years has had the effect of increasing forward looking
return expectation for many financial
advisors. Some advisors believe
that the rate of the return produced by the stock market in the past several
decades can be extrapolated into the
future. A decomposition of
historical returns into dividend yield, earnings growth, and price earnings
multiple expansion raises serious questions as to the advisability of making
such an extrapolation. So try it yourself with their analyzer.
APPLICABLE FEDERAL INTEREST RATES
LINK: The government publishes interest rates that are used
for imputed interest and original issue discount rates. Mainly for the esoteric
work I may do.
ASSET ALLOCATION: What it is and how
it works. Real life statistics. Remember the number
93.6% every time anyone
offers you an investment. Great number to use at parties and bar mitzvahs.
Can be used to deflate the male ego.
ASSET ALLOCATION LINK
1: The site by William Bernstein has articles on the efficient frontier,
rebalancing, more both in an intellectual and non academic format. Current
info on the Efficient Frontier and a heck of a lot more. Good for the serious
investor- which you must be if you have gotten this far.
ASSET
ALLOCATION LINK 2: Ibbotson has a well known name in finances and this
site has much information needed by the serious student of investing. This
site and Bernstein's above will give tremendous insight to what one needs
to know about the market.
ASSET
ALLOCATION LINK 3: Statistical evidence from Bill sharpe
ASSET
ALLOCATION LINK 4: An academic treatise by John Nuttall covers all topics
with reference to Carlton, Osborn, Hensel, Ezra, Ilkiw, Ibbotson, Brinson,
Jahnke, Singer, Evensky, Wilson, Hogan and Ludwig, Statman, Kaplan, Hood,
Beebower et al.
ASSET ALLOCATION LINK 5:
During the early 50’s, Harry Markowitz [1952]
sparked a revolution in investment management industry by demonstrating
mathematically the benefits of diversification. Relying on linear programming
techniques, he showed that the first two moments (Mean and Variance) of an
asset’s return distribution along with its covariance among other assets
could be used to construct optimal “hind-sight” portfolios. Subsequent
work demonstrated that Markowitz’s portfolio selection model (the
“Model”) could be populated with forecasted inputs and used to
assist with the investment strategy process.
The Model is a very effective tool, but it should not be viewed as
the only answer. Here the question asked is, “What if the Model
understates the risk associated with a given policy?”
ASSET
ALLOCATION HOAX LINK: (Bill Jahnke) Is it best to use a computerized
model for asset allocation? I don't think so.
ASSET
ALLOCATION AND PORTFOLIO SURVIVAL LINK: 11,880,000,000
simulated months of Monte Carlo analysis by John Norstad. Read it!!!!! Great
charts too.
ASSET ALLOCATION
STANDARD DEVIATION LINK: Excellent statistical material by TAM Asset
Management.
ASSET
PERFORMANCE LINK: How stocks, bonds and cash have worked. Good fundamentals
ASSET PROTECTION LINK:
As many as 80% of Web advice-givers are also advocating tax fraud.
Here is some straightforward advice covering family limited partnerships,
selecting a foreign trustee, foreign bank accounts, avoiding scams and much
more.
BAD ALLOCATION: This commentary from Bill
Jahnke parallels my statements about the inconsistency and incompetency of
current allocations by almost all planners
BANK
RATE MONITOR INDEX
BEHAVORIAL
INVESTING LINK: Good article by Robert Shiller (PDF)
BETA: General comments. It's not a perfect
gauge on volatility, but you ABSOLUTELY must know about it.
BETA
LINK: This is a mandatory fundamental of investing but is frequently
misconstrued in both the analysis and use. Here is a concise definition with
charts.
BETA
LINK 2: Another good definition of beta and its usefulness.
BETA
PERSISTENCY AND PREDICTABILITY LINK: A key question within this
setting is whether stocks’ systematic risks, as assessed by their
correlations with the market, are constant over time – i.e., whether
stocks’ market betas are constant. And if betas are not constant, a
central issue becomes how to understand and formally characterize their
persistence and predictability vis-à-vis their underlying
components.
The evolution of a large literature over several decades reveals
both extensive concern with this question and, we contend, an eventual implicit
consensus that betas are likely time-varying.
BETA
STATISTICS LINK: By industry
BOND
ACCRUED INTEREST CALCULATOR LINK: Interest on a bond accrues between
regularly scheduled payments. To find out how much interest is owed on a
given bond,select the appropriate bond type to figure accrued interest for
corporate and municipal bonds or government bonds. Interest for corporate
and municipal bonds is calculated using a 360-day year. Interest for government
bonds is calculated using a 365-day year.
BOND LINK:
Statistical info of all types. Highly recommended. Regular bonds,
treasuries, yield spread
BOND LINK 2: This site
by the Bond Market Association provides a good primer on bonds; links to
other associated sites; information of corporate, municipal, mortgage backed,
and inflation indexed bonds; pricing and more. Good place to start if you
are unfamiliar with the investment. Good place to go even if you are
astute.
BOND LINK 3: Prices, yield
and volumes for the most actively traded corporate bonds. Put in the CUSIP
number or NASD symbol.
BOND LINK 4: Another extensive
site where you can get current quotes.
BOND DEFAULT RISK
LINK : comprehensive credit risk modeling and measurement
resource for corporate debt. Professional stuff, not for the feint of
heart.
BOND DURATION
LINK:
BOND GLOSSARY LINK:
Go to their front page and then look for the word, gasp, Glossary.
BOND HISTORICAL
DATA LINK: Federal Reserve Board
BOND
INFORMATION LINK: This is an interactive site that gives you explanations
for various types of bonds and Treasuries.
BOND PRICING
LINK
BOND RATING LINK:
DBRS is a full-service rating agency that provides credit ratings on
issuers of commercial paper, bonds, long/short term debt, and preferred shares,
as well as asset-backed securities. DBRS also offers industry analysis, rating
reports, and ratings indices for issuers and investors throughout Canada,
the United States, Europe and Japan.
BOND RETURNS and CHARACTERISTICS: Yield
calculations, duration, price movements- the basics of bonds
BOND
VOLATILITY LINK: Excess Sensitivity and Volatility of Long Interest Rates:
The Role of Limited Information in Bond Markets (Beechey, Meredith, Department
of Economics, University of California, Berkeley PDF)
Empirical work shows that forward rates up to 15 years ahead respond
to today's news about inflation and output and exhibit as much volatility
at long horizons as at short.
BOOK
TO MARKET RATIO LINK: A semi technical (but good) analysis by
James L. Davis of Dimensional Fund Advisors Inc.
BRADY BOND LINK
BRINSON
STUDY LINK: If asset allocation explains over 90% of portfolio performance,
as the Brinson studies observe, less than 10% remains to be divided between
market timing, security selection and other factors. Or does it?
BROKER
BACKGROUND CHECK LINK: This is a NASD site where you can find out if
your broker has any disciplinary problems. You search by submitting
the broker's last name, either the first or middle name, and either the name
or CRD # of the employing firm, or the broker's CRD Number by itself.
CALCULATOR LINK
: This is a far more esoteric link for calculation of bonds (US Treasury,
Agency, Municipal and Corporate); exotics (Black Sholes and Lookback Eurodollar)
and options (Stocks, Futures and Foreign Exchange).
CALCULATOR
LINK 2: This also does options but include calculations involving warrants
and convertible bonds
CALCULATORS AND
WORKSHEET LINK:
 Worksheets by
William F. Sharpe, Stanford University. (Uses Javascript. Requires
Netscape version 3.0 or higher, or Internet Explorer version 4.0 or
higher.)
Worksheets related to portfolio management:
-
Weighted
Statistics – "This worksheet computes means, standard
deviations and correlation coefficients for data series such as monthly returns
for mutual funds."
-
Reverse
Optimization – "This worksheet finds expected returns
that are consistent with the assumption that a particular portfolio is efficient
for a given set of risks and correlations."
-
Optimization
"This worksheet finds a portfolio that maximizes investor utility subject
to constraints on holdings."
-
Performance
Measurement "This worksheet computes a number of "bottom
line" measures of historic performance."
-
Style
Analysis "This worksheet performs a style analysis for
a return series."
CAPM CALCULATOR
LINK: Valuation with the Capital Asset Pricing Model uses a variation
of discounted cash flows; only instead of giving yourself a "margin of safety"
by being conservative in your earnings estimates, you use a varying discount
rate that gets bigger to compensate for your investment's riskiness. There
are different ways to measure risk; the original CAPM defined risk in terms
of volatility, as measured by the investment's beta coefficient.
CD RATE LINK: CD's
are (normally) NOT investments- just holding periods till something better
comes along. That said, the Internet has opened up possibilities by providing
access to some very high yields that all consumers can utilize. Also, some
analyses indicate that it is better to use cash than bonds due to bonds
reflecting a high correlation. The maturities are up to 10 years and you
can stagger them like treasuries. Treasuries do have a benefit in that they
are exempt from STATE tax.
CHARTING LINK
I am not into charting but this site gives you an
idea what it is all about
CHART LINK 1: A great Java
applet that gives Internet investors a select set of features that include
basic charting, a small select group of analysis tools, news, and
quotes.
CHART
LINK 2: You can look at a chart of a stock or index from as short as
one minute up to 10 years.
CHART LINK
3:
Annualized
Returns of Various National Stock Markets
Performance
of Selected S&P Industry Stock Groups
Characteristics
of S&P 500, S&P MidCap 400, and S&P SmallCap 600
Indexes
An
Example of Dollar Cost Averaging
Long-Term
Characteristics of Mutual Funds
Tax-Exempt
versus Taxable Yields
Sample
Investment Allocations for Different Investor Age Groups
How
Total Returns from Different Types of Assets Compare
The
Power of Compounding
Total
Returns of Various Asset Classes
CHICAGO BOARD OF TRADE LINK:
You can read some tea leaves (futures) to see how others view the
future- for example, whether the FED will keep raising rates for the rest
of the year.
CLOSED END FUND ASSOCIATION
LINK: Shows value of most closed end funds
CLOSED END FUND LINK:
All sorts of info on, guess what?- closed end funds.
CLOSED END FUND LINK:
COGNITIVE
DISSONANCE LINK: - the psychology of investing. A great part of
the emotional reason why so many people screw up with investing.
COIN LINK: This site by the American
Numismatic Association has a wealth of information regarding the study of
"coins, paper and money, tokens and medals". I do not recommend these as
an investment, but as with many other links I select, it is the information
on the subject matter that is the key.
COMPANY
STOCK DIVERSIFICATION LINK: Professional paper on the
perils of using just a few stocks for a portfolio. As a rule, investors should
not expect to be rewarded for assuming single-stock risk, since investing
in a single stock must be a zero sum game across investors, with participants
in the aggregate earning the market return. Retirement plan participants
would therefore, according to this view, hold in their portfolios no more
than a market-weighted share of their firm’s company stock.
COMPOSITE INDICATOR
LINK: created by Alston Boyd as a way to predict and avoid major bear
markets.
CONFERENCE CALL LINK:
This free directory lists thousands of company teleconference calls.
Investors can learn when analysts are talking and perhaps even hear in.
CONSUMER AND BUSINESS
CONFIDENCE LINK: How consumers and businesses view the current and future
economics directly affects the market. Here is a direct resource for
analysis.
CONSUMER PRICE INDEX LINK:
Information on new data, past history. You need this to recognize the
past and potential impact on investments, social security payments, retirement
planning, etc.
CORPORATE FILINGS- See Free EDGAR below
CONVERTIBLE
BOND LINK: A good primer on how they work
CORRELATION: Statistics and commentary
including rebalancing and asset allocation. They all must work together.
CORRELATION
LINK: Correlation Matrix of Annual Rates of Return, 1950-76
CORRELATION
LINK 2: iShares lets you put in up to 50 securities.
Interesting
CORRELATION
LINK 3: Great article on the misconceptions of correlation by Rick
Ferri
CORRELATION
LINK 4: Shows you scatter graphs and you learn how to match them
up to the proper correlation.
CORRELATION
LINK 5: This is for Vanguard funds only. It gives the correlation between
two funds you pick- though provides no time frame for the assessment. In
other words, correlations vary all the time. Maybe this is based on 2001,
maybe 2003. Big difference. But the overall review is worthwhile study
material
CORRELATION
LINK 6: Rick Ferri- good stuff. Must read. But will the future
be the same as the past? I don't think so.
CORRELATION
VOLATILITY LINK: A 35 year study
CREDIT RISK LINK: The
model provides a tool for investors to understand how the equity and credit
markets are pricing credit risk. It can serve as an indicative price for
an illiquid credit, or as a monitoring device to identify significant credit
spread moves. It can be used as a relative value/hedging tool to take advantage
of relationships between the credit and equity markets, and analyze how the
credit and equity markets will respond to major changes in a company's capital
structure.
CURRENCY CONVERTER LINK:
If you are travelling overseas, you will find this invaluable in determining
how far your money will travel. But it's most apropos with an understanding
of foreign currency devaluations and/or dollar appreciation.You can see the
after affects on foreign investments. The site offers lots of other interesting
links as well.
CURRENCY HEDGING: I have read countless
articles on hedging foreign currencies to protect yourself from losses- or
in a more risky scenario- to leverage your gains. Do they work. Apparently
not- there is little to no correlation, just basically luck
DAILY
TREASURY YIELD LINK from the US Treasury
DERIVATIVES: Bank of America, Piper
Jaffrey and others that offered "conservative" funds tanked big time a few
years ago because they used derivatives in their funds. They are like options
in that you use leverage. If you win, you can make a lot of extra money.
If you lose, you can fork over $50 million+ for the losses. Here are some
basic definitions and commentary. Seldom, if ever, that you would buy these
yourself. But many funds use them so you need to be aware. Info includes
CMO's.
DERIVATIVES LINK: The site provides
information on options, warrants, convertible bonds, futures, etc. It's not
necessarily relevant to the average investor but, as above, it is worthwhile
to know if your fund is using them
DIAMOND
LINK: DIAMONDS Trust Series I is a pooled investment designed to closely
track the price and yield performance of the Dow Jones Industrial
Average("DJIA"SM.)
DIVERSIFICATION: I don't have
the graphs shown yet, but all the valid commentary and statistics are there.
You have to be able to answer this question in order to buy stocks (and know
what you are doing). "How many stocks do you need to have in a portfolio
in order to insulate it due to unsystematic risk?" Do you know?
DIVERSIFICATION
LINK: "Have Individual Stocks Become More Volatile? An Empirical Exploration
of Idiosyncratic Risk" (with Martin Lettau, Burton Malkiel, and Yexiao Xu),
Journal of Finance, February 2001. Read this!!!
DIVERSIFICATION
LINK 2: Why Do Individual Investors Hold Under-Diversified Portfolios?,:
WILLIAM N. GOETZMANN , ALOK KUMAR The definitive article on diversification
in the real world.
DIVIDEND
DISCOUNT MODEL LINK : Short Article The DDM calculates the present value
of future dividends and the final price based on certain assumptions. Mandatory
knowledge if you are truly an investor
DIVIDEND GROWTH
LINK:
DIVIDEND PAYOUT LINK:
Find the highest paying dividend stocks
DJIA HISTORY LINK:
DOLLAR
LINK: A graph of the trade weighted value of the dollar from the Minneapolis
FED.
DOLLAR COST AVERAGING: This
gets a lot of press, but it doesn't work. Surprise!
DOLLAR
COST AVERAGING LINK: As stated in my article, DCA does not work about
2/3rds of the time. Here is a calculator with fresh statistical evidence
that proves it is better to do a lump sum. That said, it is foolish to invest
in a bad market- meaning last year, lump sum, DCA or otherwise. Investing
is not done in a vacuum.
DOLLAR
COST AVERAGING LINK: Mathematical Illusion: Why Dollar-Cost Averaging
Does Not Work, John G. Greenhut, Ph.D.
DOW DIVIDEND THEORY: Essentially this
means buying the 10 stocks of the DOW that are out of favor and watching
their prices increase as they get better. But there are even better
ways.
DOW JONES INDEX LINK: It
contains info not only on the Dow Jones Average, but also the Global, REIT,
Internet indexes and more.
DOW JONES INDEX
LINKS: Tremendous amount of historical information on all sorts
of indexes.
DOW JONES RELATIVE RISK
INDEXES LINK
DRIP LINK: The site provides
information about buying stocks without a broker through Dividend Reinvestment
Plans. Overall, however, the specific use of such stocks almost invariably
leads to poor diversification and high risk.
DURATION
LINK: A good explanation from Morningstar. You need to register
EuroCOIN LINK:
EuroCOIN™ is the leading coincident indicator of the euro
area business cycle available in real time. The indicator provides an estimate
of the monthly growth of euro area GDP – after the removal of measurement
errors, seasonal and other short-run fluctuations.
ECONOMEISTER LINK:
Great page for all types of economic articles as well as info on
international economic dates of importance, etc. Not exactly easy reading
like Sports Illustrated, but worth more for your life.
ECONOMIC ANALYSIS LINK: This
is a site offered by Dr. Ed Yardeni- chief economist of Dutsche Morgan Grenfell
in New York and former economist of the Federal Reserve and the U.S. Treasury.
He has weekly prognostications, faxes on demand for many subjects, charts
and more. If you read a lot of statistical data, you will find his insights
worthwhile to review.
ECONOMIC INDICATORS: Leading
indicators supposedly show the direction the economy will move to- coincident
confirms the current condition- and lagging supports the prior indicators.
They are not prefect but are absolutely mandatory analysis for anything to
do with investments.
ECONOMICS LINK 1: The Economist
Intelligence Unit "produces objective and timely analysis and forecasts of
the political, economic and business environment in more than 180 countries"
and also provides one of the world's most highly regarded financial magazines-
The Economist. The site has articles on literally every country in the world
and all are written by the foremost economic experts. Detailed analysis and
highly regarded.
ECONOMICS LINK 2: The Euromoney
site also has a HUGE amount of data on international developments and other
valuable links. Between this and the Economist link above, you should be
able to get a wealth of info for countries around the world.
ECONOMICS LINK 3: This is the
site for Financial Times- "World's Business, Economic and Political News
through Global Perspective". Sure I know some of it is redundant with the
links above, but you are apt to get a different skew on issues.
ECONOMICS LINK 4: A most
unique economics site of economic data, forecasts, charts, tables, and analysis.
You can view data on all 50 states and Washington D.C. as well as 257 different
metro areas- even your own zip code; rank the different states using nearly
130 different criteria, see index and recession probability statistics for
various State economies, includes a stock market valuation where you can
calculate the market's fair value using your own assumptions and much more.
Worth the look
ECONOMIC LINK 5:
Extensive free data from Briefing .com
ECONOMIC STATISTICS
LINK: Government information on output, income, employment, money stock,
international statistics and more. Great for conversations.
ECONOMIST RESOURCES LINK:
Over 1,000 resources
EDGAR FILINGS SEARCH LINK:
A fast way to get to SEC company filings
EDGAR- see also FREE EDGAR
ECONOMIC EDUCATION
LINK: From the Federal Reserve. Generally for the novice but good
material nonetheless.
ECONOMIC
RESEARCH LINK: (Philadelphia
FED)
EFFICIENT MARKETS: General comments
on Efficient Market Theory, Random Walk and International efficiency.
EMERGING MARKETS BOND LINK: This
site has info and prices on Brady Bonds as well as current news reports on
Emerging Markets and the countries of Argentina, Brazil, Mexico, Venezuela,
Chile, Colombia, Indonesia, Korea, Panama, Thailand and Uruguay.
EMERGING MARKETS LINK 1: This site
by the International Finance Corp.- the private sector arm of the World Bank-
notes that it is the "world's leading source of information on stocks markets
in the developing world" plus more.
EMERGING MARKET LINK 2: Obviously
there is some crossover info with the site above, but the Emerging Market
Companion site has some of its own interesting material, i.e. Correlation
on International Currencies, International Laws and Regulations, etc. which
one might need.
You need this insight when investing abroad and the emerging markets
can be a good place for diversification.
EMERGING
STOCK MARKET LINK - The CAPM Challenge With a double-digit growth
rate in total market capitalization over the last decade, emerging stocks
are becoming an increasingly important investment category. Emerging market
equities behave in a different way from equities traded on developed capital
markets. In the literature, there is usually a consensus on at least four
distinguishing features of emerging market stock returns: (1) volatility
is high, (2) correlations with developed market returns are low, (3) returns
are predictable to a certain extent, (4) third and fourth moments matter.
EMPLOYEE STOCK OPTION PLAN LINK:
An independent site that offers all sorts of information on ESOP's
with links to other sites of interest.
EQUITY INDEX ANNUITY LINK: These
have limited applicability, but the site provides a lot of info on what is
going on in the industry.
EQUITY
INDEX ANNUITY LINK 2: NASD commentary. Not bad. These
are tough to understand. Actually, they are next to impossible to figure
out what they might do.
I state that they will beat a fixed annuity about 70%- 85% of the
time; provide the same as a fixed annuity about 10%- 20% and will provide
less than a fixed annuity about 5%- 10%.
EQUITY
INDEXED ANNUITIES 3 LINK: Good overview
EQUITY
LINKED NOTES LINK: Structured products can be too complex
and opaque for retail investors and registered representatives to understand.
This complexity and opaqueness allows structured products to survive in the
marketplace despite their marked inferiority to traditional portfolios of
stocks and bonds.
EQUITIES
LINK: Statistical info of all types. Highly
recommended
ETF LINK:
Covers most Exchange Traded Funds
EXCHANGE TRADED FUNDS (ETFs)
and CLOSED END FUNDS CEFs) LINK: feature intra-day trading and stock
exchange listing. They rapidly are changing the way many financial advisors
and investors manage their portfolios. Whatever you're looking for in the
world of ETFs and CEFs - prices, net asset values, dividends, performance
histories, etc
EXCHANGE TRADED
FUNDS PERFORMANCE LINK: What Exchange Traded Fund had the largest
price increase over the past year? Which ones haven’t done as well?
With a wide variety and number of ETFs available it is helpful to compare
past performance. This application will allow you compare price performance
over the time period you select.
ETF
LINK: Information on Exchange Traded Funds
ETF LINK 2:
Ditto
FALLEN COMPANIES: Most companies
that go into bankruptcy and experience other severe financial problems usually
do so for a reason- they suck. Yes, you can buy distressed companies hoping
for a turnaround, but most will never regain their prominence. (IBM was an
anomaly- look at what happened with Digital.) Disagree? Go out and buy some
Enron and Worldcom and then tell me how hard your dog is laughing at
you
FDIC INSTITUTION DIRECTORY
LINK: Obtain demographic data and financial profiles of each FDIC-insured
depository institution derived from quarterly reports filed with Federal
regulators.
FEDERAL RESERVE ECONOMIC
DATA LINK: (FRED) This is part of the site by the Federal Reserve Board
of St. Louis and has such info as the historic yield on 10 year Treasuries,
latest CPI, etc. and also the ability to get Emailed on all types of other
data. Since you need this type info for investment selection, it should be
reviewed regularly.
FEDERAL STATISTICS LINK: The
Federal Interagency Council on Statistical Policy maintains this site to
provide easy access to the full range of statistics and information produced
by the 70+ governmental agencies.
FIDELITY LINK: This
is not a plug for Fidelity per se. Click their button for mutual funds. At
the next page, click Research located on the right. The issue is that you
not only can get great info on their funds, but you can then get info on
just about all other funds from different families and compare.
FINANCE, INSURANCE,
and REAL ESTATE LINKS:
The finance department of Louisiana State University has provided
an exceptional list of links to all sorts of investment areas. Good
Stuff
FINANCE LINK:
This is called the WEB site for "Discerning Finance Studies" and contains
a wealth of links that are mandatory you review. Highly
recommended.
FINANCIAL
ACCOUNTING RED FLAG LINK: From two professors at Louisiana State
University comes these accounting warnings that you are apt to see from various
companies and mutual funds. As stated many times, the ability to select
individual stocks is literally impossible unless you are completely aware
of these problems.
FINANCIAL ADVISER
QUESTIONNAIRE: There are a number of questions you might ask an
adviser in the initial investigation. I put my answers directly thereafter
so you can directly see how I work.
FINANCIAL LITERACY: Are people
really that smart about investments? Nope! And here are some statistics that
prove it.
FINANCIAL REPORT LINK: The
Public Register's Annual Report Service (PRARS) is America's largest annual
report service. Company financials, including annual reports, prospectuses
or 10k's on over 3,200 public companies are available without charge to the
investing public.
FEDERAL RESERVE
EDUCATION LINK: History, Structure, Monetary Policy, Banking Supervisions,
Financial Services. Once again, the government provides exceptional information
in a web site.
FINANCIAL RISK LINK:
There are over 300 pages of information on financial risk management
and include info on value at risk, derivative instruments, credit risk management
and financial engineering. Good material for the serious investor.
FINANCIAL
TOOLS LINK: Java Based financial tools by Campbell Harvey of Duke University.
For use in professional analysis covering bond valuation, efficient frontier,
2-assets means variance graph and more. Exceptional.
FITCH IBCA LINK:
Access research reports under categories such as "Financial Institutions,"
"Corporates," and "U.S. Public Finance." Registration is required but it
is free.
FOREIGN EXCHANGE LINK: This
site offers daily updated information about foreign exchange markets as forex
news, market reports, forecasts, and real-time exchange rates and charts.
A currency converter and historical tables are also available.
FOREIGN INVESTMENTS: Basic consideration
for asset allocation. But beware of the issues of currency adjustments.
FREE EDGAR LINK: Edgar is
a government site that allows info on corporate filings- for a cost. FREE
Edgar is an independent site that has free real time access to SEC filings,
you can get Email notifications of information on a corporation, there is
software for the discounted cash flow calculation (that's the way you figure
out the value of a stock) and a whole lot more. Excellent way to stay up
on events if you own individual securities.
FUND EXPENSES: A lot of people are
not paying attention to this because their funds have been going up and up
and up. But expenses have been also going up and up and up and can truly
reduce your total returns by a significant amount. And regardless of the
economy, you MUST look to low fees in bond funds since it really hurts
those.
FUND
COSTS LINK: From Vanguard. Let's you compare a Vanguard fund against
many other fund families and allows you to see how they did before and after
costs. Very illuminating.
FUND EXPENSE CALCULATOR LINK:
It not only calculates the different in basic expense fees but
also allows you to see the difference in taxes and the drop in total return
reflected by an after tax rate of return. Will really open you eyes.
FUND
FEE LINK: Good article on the impact of fund fees by William
Bernstein.
FUND
MANAGEMENT DECISION LINK: [About 45 pages long; Adobe Acrobat reader
required] An extensive article detailing the trials of (young) managers who
make "bad" investment decisions and how quickly they may be terminated. They
"may have an incentive to avoid unsystematic risk............." Interesting
insight and certainly mandatory reading gif you are using a young managed
fund/fund manager.
FUND RATINGS:
From S&P
FUND STATISTICS
LINK:
FUTURES LINK: Commodity
futures news and research for 25 commodity futures markets.
FUTURES
GLOSSARY LINK: (pdf) An introduction to the language of the futures industry,
brought to you by the National Futures Association
FUTURES
QUOTE LINK: Quotes and charts covering corn soybean, cattle, NASD,
Gold, Oil, Currencies, etc.
FUTURES
TRADING LINK: Explains the risks and opportunities of futures trading.
Not to be used by middle america investors- this is just information.
GLOBAL FUND, ETF, INDEX
DATA TO 12/01 LINK: Good data from Index Funds
GLOSSARY: My real world
interpretation of lots and lots. Look at "male ego".
GLOSSARY LINK: An extensive
list of financial and non financial terms.
GLOSSARY
OF FINANCIAL AND INVESTMENT TERMS LINK: Campbell R. Harvey,
J. Paul Sticht Professor of International Business. Excellent!
Excellent!
GLOSSARY
OF ETF AND MUTUAL FUND TERMS LINK
GNMA'S: Government National Mortgage Association
Passthroughs and other agency issues do have some form of backing by the
U.S. government if the mortgages default. That's how and why they get sold.
But the underlying risks and lack of understanding of the unlimited calls
make these far from conservative investments.
GOLD: Statistics and charts
GOLD RETURN LINK 1800- 2006
GOVERNMENT REPORT LINK:
Want to know what government reports are coming up soon so you can make
some decisions?
HEDGE FUNDS
HEDGE FUND ARTICLE LINK:
These may work under certain conditions- though I neither recommend
or use them- and this site provides current commentary on the pros and
cons of these risky ventures. View at your own risk.
HEDGE FUND LINK 1: Hedge funds
attempt to hedge the market through shorting stock, using puts, etc. primarily
for a down market. Mostly for heavy hitters (accredited investors). This
site provides statistical data for all types of hedge funds around the
world.
HEDGE FUND LINK 2: Some
free/some fee info. The data covers 2,200+ hedge funds and 1,700 managers
throughout the world.
HEDGE FUND LINK 3:
This is an industry link but has a lot of good
info.
HEDGE FUND INDEX LINK: The
CSFB/Tremont Hedge Fund Index is currently the industry's only asset-weighted
benchmark of hedge fund performance.
HEDGE FUND
PERFORMANCE LINK: (Offshore Hedge Funds: Survival & Performance
1989 - 1995 in Adobe Acrobat format) found "no evidence of performance
persistence in raw returns or risk-adjusted returns, even when we break funds
down according to their returns-based style classification." They conclude
that "the hedge fund arena provides no evidence that past performance forecasts
future performance."
HEDGING STRATEGIES LINK:
(Craig McCann, PhD, CFA and Dengpan Luo, PhD) Investors holding concentrated
investments are exposed to uncompensated risk – additional risk for
which they receive no additional expected return. Investors bearing uncompensated
risk are more likely to suffer catastrophic investment losses. Uncompensated
risk can be inexpensively estimated and the wealth destroyed by concentrated
portfolios can be measured before losses materialize.
It is the responsibility of investment professionals advising clients to
explain the uncompensated risk in a portfolio and to counsel against continuing
to hold concentrated positions. Investment professionals should also explain
widely available risk management strategies.
Prudent investment management requires that securities portfolios be diversified
because diversification reduces risk without reducing expected returns.
HIGH YIELD/JUNK BONDS: I have used these
for years and they can provide a very good return. But you must understand
diversification, overall ratings and economics- otherwise you are taking
far too much risk.
HIGH YIELD & BOND INVESTING LINK by Yanni
Partners Inc. A discussion of the benefits of adding high yield bonds
("publicly traded US corporate bonds rated below 'investment grade' by Standard
& Poor’s or by Moody’s Investors Service") to a bond
portfolio.
HISTOGRAM
LINK:
HISTORICAL
ASSET RISK & RETURNS LINK
HISTORICAL
BEHAVIOR OF ASSET RETURNS LINK
HISTORICAL
DATA LINK 1: Annual Returns on Investments of stocks, T Bills and
T Bonds since 1928 to 2006 and also with the Compounded Value of $ 100. By
Aswath Damodaran
HISTORICAL DATA LINK 2: Type
in the ticker symbol and get historical data going back for years.
HISTORICAL INDEXES
LINK: Descriptions and history of the S&P 500, Barra Value, Muldex,
Russel indexes and more.
HISTORICAL
TREASURY BILLS, NOTES AND BONDS LINK: Access recent treasury
bill, treasury note, and bond auction results tables. Also locate treasury
bill, note, and bond auction history from 1/1/1980 to the present. Also available
is the public debt figure and the Monthly Statement of Public Debt.
INDEX ANNUITIES: Life insurance/annuity
companies try to find every way to make a sale. Fixed annuities are conservative
but don't earn much. Pure variable annuities take a lot more risk. So the
companies came up with an annuity that is coupled with the S&P 500 index.
Any good? Probably not- and, in my mind, absolutely confusing. Read this
article and decide for yourself what you need to ask.
INDEX
LINK 1: This Standard and Poors site describes the S&P 100, S&P
500, MidCap 400, Small Cap 600, S&P Barra Links, the names of the companies
plus more. The 500 Index is the most widely used index for comparison to
other investments and you should be aware of what it is and how it
works.
INDEX LINK 2: Commentary
and articles on the value of using indexing.
INDEX DATA LINK:
Statistics on just about anything index.
Excellent!
INDEX
FUND SCREENER LINK: Good data from Index Funds
INDEX RETURN
LINK: This uses the dividend discount model. Better
than most but it still requires an estimation of future returns in order
to evaluate current prospects. Just remember, garbage in, garbage out.
INDEX
STANDARD DEVIATION LINK: 10 year risk and return numbers by Index
Funds.
INDEXES: Definitions of the numerous indexes
and some statistics as well. Remember, about 75% of all growth stock managers
do NOT outproduce the S&P 500.
INFLATION: Basics comments about the
validity of low inflation for the economy and stocks as well as a chart on
what the CPI has been since 1975. Need to know material. See also Consumer
Price Index.
INFLATION CALCULATOR LINK:
Put in any amount of money from any date starting at 1800 and ending
on any date up to 2000 and it will automatically compute the final
number.
INFLATION PROTECTED
CD LINK
INITIAL PUBLIC OFFERINGS: Do they work?
Sometimes. But even if they do, you ain't gonna be able to buy the good ones
anyway.
INVESTMENTS
GLOSSARIES LINK:
INVESTMENT
PHILOSOPHIES BOOK LINK: An on line book with hundreds
of pages of info.
IPO ARTICLE
LINK: A concise article on how the Initial Public Offerings of Securities
is conducted.
INITIAL PUBLIC OFFERING
LINK: Like it says above, you better know the risks before you even attempt
these. This link, however, may provide some of the info you need.
IPO LINK: Lots of free
info
IPO LINK 2: EDGAR
Online provides info on 2,589 IPO filings and 1,475 underwriters.
IPO LINK 3
IPO LOCKUP LINK: Website to
track lockup expiry dates for IPOs.
INSTITUTIONAL MONEY MANAGEMENT CHANGES:
From "How Are Large Institutions Different from Other Investors? Why Do These
differences Matter?" by Gompers and Merrick. Past history and statistics
does permit a focus on the present and future. But many times you need
to look further and the evidence by these two professors do indicate a dramatic
change in who owns what (mainly mutual funds and investment advisers) and
what might alter future projections.
INSTITUTIONAL VERSUS INDIVIDUAL OWNERSHIP
OF SECURITIES: Institutional ownership of securities has increased
dramatically over the last 40 years and has changed the returns on various
subgroups.
INTEREST
RATE LINK: All sorts of statistical commentary and charts
INTEREST
RATE LINK 2: Federal reserve for just about
all bonds and yields
INTERNATIONAL EXCHANGES: This page
contains direct links to 150+ foreign exchanges- Athens to Zagreb. Go to
each and impress your friends.
INTERNATIONAL MARKET RISK: You
need to diversify, but just how does the risk of one country compare to another-
or to the U.S. Good 1997 chart from WSJ
INTERNATIONAL MONETARY FUND
LINK: The IMF is "a cooperative institution that 182 countries
have voluntarily joined because they see the advantage of consulting with
one another in this forum to maintain a stable system of buying and selling
their currencies so that payments in foreign money can take place between
countries smoothly and without delay. It is neither a development bank, nor
a world central bank, nor an agency that can or wishes to coerce its members
to do very much of anything. The IMF lends money to members having
trouble meeting financial obligations to other members, but only on condition
that they undertake economic reforms to eliminate these difficulties for
their own good and that of the entire membership." A required review for
an understanding of international economics.
INVESTING BASICS: Paul Samuleson is
a Nobel Laureate and Professor Emeritus in Economic at MIT. I have included
some of his insights from an April 1998 interview as well as some of my own
commentary regarding indexing, market timing, diversification and other elements
of investing that astute investors must recognize.
INVESTING HOME STUDY
COURSE LINK: Course by Rutgers Cooperative Extension in cooperation with
the Cooperative State Research, Education, and Extension Service of
the U.S. Department of Agriculture, and the U.S. Securities and Exchange
Commission: This 11-unit home study course was developed by the Cooperative
Extension system for beginning investors with small dollar amounts to invest
at any one time.
INVESTMENT
ANALYSIS TOOLS LINK: I am using this for a case
INVESTMENT ARTICLES AND COMMENTARY:
Miscellaneous commentary on various investment issues
INVESTMENT QUIZ: The answer is obviously
included on this page. You may want to try this first to see if you know
the most basic element of diversification. If you don't know, your adviser
must.
INVESTMENT FRAUD LINK:
The site analyses the various frauds offered to the public.
INVESTMENT
BOOK ONLINE LINK: But note that it does not contain the element
that risk goes UP the longer you hold a security. So what's the point of
these books?
INVESTMENT
RETURNS LINK: 1986- 2005 by Callan Associates
INVESTMENT
TEXTBOOK LINK: This On-Line book' "An Introduction to Investment Theory"
by Professor William Goetzman at the Yale School of Management is just great.
Good research material not only for introductory info, but as a good brushup
as well (myself included).
INVESTOR HOME PAGE LINK:
This is the home page by Gary Karz, CFA, and one of the best sites on the
Internet for reviewing various concepts in investing with links and articles
to the best minds in the investment field. The point to that statement is
for investors/students/consumers to recognize those individuals who have
greater expertise in particular areas and to therefore use their greater
knowledge and research base. Go to his page and learn.
INVESTMENT AND PLANNING GLOSSARY
LINK:
INVESTOR PROTECTION LINK:
This is a link to a non profit organization that has some useful insight
and information- particularly for the novice investor. It provides links
to other sites, shows how to avoid scams, etc. Unfortunately, they offer
the same advice on finding a good adviser as all others- referrals.
Hate to tell you folks- that's almost EXACTLY the reason why people LOSE
money. Referrals invariably are used INSTEAD of research (READING) and other
definitive homework. And calling the SEC about whether your broker has ever
been criticized is mostly a waste of time in determining who you should you
use. Read WHO CAN YOU TRUST.
Also click here to find the easiest way to
determine if someone MIGHT know something about money. Anyway, it's still
worthwhile to go to their page.
"INVESTORAMA" LINK:
The page is designed as a launching pad to other investment sites of all
types- good and bad, free and for a fee. But with over 4,500 links, you are
apt to find something worthwhile.
JENSEN'S
ALPHA CALCULATOR LINK: Pretty simple
LEADING INFLATION INDICATORS
LINK: This site by the Economic Cycle Research Institute grades the major
market moves and the affect upon economic indicators. A very valuable tool
when trying to "guesstimate" where the economy will be in the next few months
or years.
* "If you are looking at bonds and stocks as parts of
a portfolio, what you need to figure out what are the returns and risk and
the correlation between them."
Bill Sharpe
MAGIC FORMULA INVESTING LINK:
A free site that says, through back testing, that it would have
produced a 33% return from the late 1800's to now. Obviously you take it
with a grain of salt but it is interesting nonetheless.
MARGIN ACCOUNTS: Do you know how it works?
Do you know what a "margin call" really is? Do you know what a Special Memorandum
Account is? Bet you don't. Further, I bet your broker doesn't either. So
look this article over if you are using margin and see just how sophisticated
you really are.
MARGIN
LINK: All about margin by the SEC
MARKET
LEADING INDICATOR LINK: "The Best Market Indicator Ever" by William
J. Bernstein. He refers to fund cash and his article provides the statistics
for substantiation. Definitely worth reading and highly recommended-
as is his other material.
MARKET NEUTRAL FUNDS: Commentary about
the ability of buying long and selling short. Not as risk free as the mangers
would have you believe.
MARKET TIMING: Think you can call
the shots for the highs and lows? Schmuck!
MARKET
TIMING LINK: 43 pages of all the reasons why it doesn't work.
Enjoy!
MASTER
LIMITED PARTNERSHIP LINK: Good overview by Financeware
MEAN VARIANCE OPTIMIZATION LINK (pdf) by Scott L.
Lummer, Mark W. Riepe and Laurence B. Siegel. The authors "review the limitations
of MVO (both from a theoretical and a user-oriented perspective) and provide
procedures for estimating the necessary inputs (expected returns, standard
deviations, and correlations) for MVO when used as an asset allocation
tool."
MEAN VARIANCE OPTIMIZATION AND MODERN PORTFOLIO THEORY LINK
by Efficient Solutions. Explanations and examples (complete
with charts and graphs) of Mean-Variance Optimization (MVO) and Modern Portfolio
Theory (MPT) in both single and multiperio
MERGER LINK:
Impending company mergers
MONEY
GROWTH LINK: NY FED
MONEY MARKET FUND LINK
1: All sorts of info to research a money fund including assets, total
return and yields, portfolio holdings, shareholders, average maturity, expense
information, ratings and market commentary.
MONEY MARKET FUND DATA LINK
2
MONTE
CARLO ARTICLE LINK:
MONTE
CARLO SIMULATION LINK: Monte Carlo simulation is a statistical technique
by which a quantity is calculated repeatedly, using randomly selected "what-if"
scenarios for each calculation. Though the simulation process is internally
complex, commercial computer software performs the calculations as a single
operation, presenting results in simple graphs and tables. These results
approximate the full range of possible outcomes, and the likelihood of each.
When Monte Carlo simulation is applied to risk assessment, risk appears as
a frequency distribution graph similar to the familiar bell-shaped
curve
MONTE
CARLO SIMULATION LINK 2:
MONTHLY
RETURN LINK: From Barra- enter the dates and view the monthly returns
over various time frames for the S&P 500 and other Barra groupings.
MORNINGSTAR LINK: Literally
everyone is familiar with the Morningstar rating service and this provides
some excellent information. Just remember, it's ratings reflect past
history- look to current economics for directions to the future. Also
to books like What Works on Wall Street. The combination of
all these efforts foretells success, not just looking
at one.
MORNINGSTAR
STAR FUND ANALYSES LINK: "Star risk-adjusted ratings summarize both the
performance of the domain in which a fund operates and the performance of
the fund relative to others in its domain. Selection of funds with high star
risk-adjusted ratings is far more likely to result in the choice of funds
in categories with strong recent performance rather than in funds in categories
with poor recent performance. In many cases this is likely to be a poor approach
to fund selection. There is little evidence that investment in categories
that have done well in the last three years is a superior investment strategy."
From Bill sharpe. I agree with the commentary with this added note- if you
are going to compare one fund against another, the Morningstar material may
help you delineate between the two. But the overall selection comes from
economics and future trends- not necessarily from what happened in the
past.
MUNICIPAL
BOND LINK 1 : A primer on the workings of municipal bonds. Good
introductory information.
MUNICIPAL BOND LINK 2: All
sorts of info on Munis from Munidirect. Also provides current quotes.
MUNICIPAL BOND LINK 3:
Good research material
MUNICIPAL SECURITIES RULEMAKING BOARD
LINK: The MSRB was established to develop rules regulating securities
firms and banks involved in underwriting, trading, and selling municipal
securities. It is a self-regulatory organization like the NASD that is subject
to oversight by the Securities and Exchange Commission (SEC).
MUTUAL FUND ALARM LINK: This
non commercial site provides information you might need to know about your
mutual fund and whether significant problems have arisen- for example you
have a new manager, the investment direction has changed, etc.g fund
families.
MUTUAL
FUND ANALYSIS LINK A free site covering over 17,000 funds. Easy
to use, let's you compare funds quickly.
MUTUAL
FUND BREAKPOINT SEARCH TOOL LINK: This tool allows you
to search NSCC's Mutual Fund Profile database for key information related
to mutual fund sales charges.
MUTUAL FUND COSTS
CALCULATOR LINK: "The SEC Mutual Fund Cost Calculator enables investors
to easily estimate and compare the costs of owning mutual funds. The
Cost Calculator takes the mystery and math out of the cost equation, revealing
how costs add up over time."
MUTUAL FUND DATA LINK: This
gives some very descriptive information on over 13,000 funds.
MUTUAL
FUND DICTIONARY LINK: In layman's terms and pretty direct and
honest.
MUTUAL
FUND EXPENSE ANALYSER LINK:
MUTUAL
FUND FACTS LINK: The Investment Company Institute offers a huge amount
of info on every element of mutual funds.
MUTUAL
FUND FEE CALCULATOR LINK: This Calculator makes it easy for you to see
the impact various mutual fund fees have on your investment return over
time.
MUTUAL
FUND PERSISTENCY LINK: (Larry Swedroe) Once common risk factors
(investment style) such as size and value are accounted for, the average
active fund underperformed by 1.8% per annum.Any persistence in fund performance
was easily explained by common factors such as expenses, transaction costs,
and exposure to the aforementioned risk factors.
MUTUAL FUND
REPORT LINK: Tons of info and charts on recent mutual fund
movements. From the Boston FED As I have repeatedly stated, the government
does some really ridiculous things. But most of their sites contain an absolute
wealth of knowledge found nowhere else.
NASD LINK: This page lets
you review potential changes in the laws, get material about your brokerage
firm and agent, etc.
NASD BOND
INFO LINK: This NASD site will give you an opportunity to review
basic descriptive information on many corporate bonds, as well as individual
and summary transaction data gathered by NASD. The intent of the NASD
BondInfo® Web Site is to improve the transparency of the corporate bond
market and allow investors to make better informed investment
decisions.
NASD GLOSSARY
LINK: See if you find diversification, alpha, standard
deviation, asset allocation or any of the other fundamentals of investing.
Go ahead, knock yourself out.
NASDAQ
RETURN LINK 1938- 2006
NIKKEI
225 RETURN LINK: 1914-2005
NEW YORK STOCK EXCHANGE LINK: This
world's most major stock exchange's page has a list of all the 3,000+ companies
on the NYSE with applicable links, has stocks of non U.S. corporate issuers,
how the exchange works, publications, research papers, glossary and on and
on and on.
OLD STOCK AND INDICES PRICE LINK:
Put in ticker symbol. Ask for quote. Then select "Chart" and finally
ask for "Historical Quote"
OPTIONS: Most of the basics on puts and
calls in a format that you can follow. I have not included spreads and straddles
since, if you are using those, you have to know all the material
I have written throughout this area. See pricing under Calculator links
above.
OPTION
CALCULATOR LINK: This calculator uses an adjusted Black-Scholes model
to value european options.
OPTION
CALCULATOR LINK 2: This determines the net return if an employee
exercises a ESO. You can vary the tax bracket, etc. Includes "when to exercise"
and more.
OPTION CALCULATOR
LINK 3: Yet another tool for valuing employee stock options. So why another
one? I have no idea of the underlying programs used. I'd check the answers
to a couple to see if they dovetail.
OPTIONS CLEARING CORPORATION
LINK: The OCC is the largest clearing organization in the world
for financial derivative instruments. OCC issues and clears options on underlying
financial assets including common stocks, foreign exchange, stock indexes,
U.S. Treasury securities and interest rate composites.
OPTION
DEMO LINK: Shows how these work- Option Trade, Stock Trade, Spread Trade,
Straddle Trade and Covered Write Trade
OPTION
EXPIRATION LINK 1: Options Expiration Calendar Last trading day for all
regular stock options and some index options.
OPTION
GLOSSARY LINK:
OPTION QUESTION LINK:
Frequently asked questions about (wanna guess?) options trading.
OTC BULLETIN BOARD LINK:
The OTCBB is a regulated quotation service that displays real-time quotes,
last-sale prices, and volume information in over-the-counter (OTC) equity
securities. An OTC equity security generally is any equity that is not listed
or traded on Nasdaq® or a national securities exchange.
OVERCONFIDENCE: Many people are
significantly overconfident in their ability to pick an investment- particularly
when we have had such a bull market. Here is some commentary showing just
how shallow such reasoning actually is.
PAST PERFORMANCE: If a fund has
done well in the past, what are the odds it will do great the next quarter
or year? Here are some real life numbers.
P/E
RATIO LINK: Current by Sector
PERSISTENCY
OF THE RETURNS OF ACTIVELY MANAGED FUNDS LINK: Do actively managed funds
keep on producing? Nope
PINK SHEET LINK: Info
for OTC stocks including charts, quotes, news, volume, etc.
PREFERRED STOCK: A concise overview
of the value of preferred stock by New York Times writer Robert Hershey
PREFERRED STOCK LINK:
research preferred stocks, convertible preferred
stocks, preferred funds, REIT preferred funds, and baby bonds - exchange
traded $25 par value corporate bonds.
PRICE
TO BOOK VALUE LINK: By sector
PRIME INTEREST RATES
LINK: Monthly prime interest rates with back dates
PROBABILITIES: How to use returns,
standard deviation and simple asset allocation to design a portfolio of a
particular risk and resulting return.
PRUDENT
MAN RULE LINK The Uniform Prudent Investors Act was completed by
the Uniform Law Commissioners in 1994. This act removes much of the common
law restriction upon the investment authority of trustees of trusts and like
fiduciaries. It allows such fiduciaries to utilize modern portfolio theory
to guide investment decisions. A fiduciary’s performance is measured
on the performance of the whole portfolio, not upon the performance of each
investment singly. The act allows the fiduciary to delegate investment decisions
to qualified and supervised agents.
PSYCHOLOGY OF INVESTING
LINK: People (mostly men) think they have all the answers for
investing. This article, by Gary Karz, provides numerous examples of investor
"capabilities" and clearly identifies many of the actual flaws in the standard
investment process. Couple that with the study by the 1992
National Adult Literacy Survey
and you can easily see what can go wgron.
PYRAMID OF INVESTING: My
interpretation of how risks need to be identified as compared to each other.
You CANNOT buy assets at the tip of the pyramid unless you have properly
invested in the lower sections- unless you're stupid of course.
PYRAMID OF MUTUAL FUNDS: How the
risk of various funds compare to each other. Basic example and commentary
was submitted to SEC. Same comment as above- you can't use the higher risk
funds until you have filled out the lower sections. But this happens all
the time and is one of the main reasons why people complain about losing
money.
R SQUARED LINK:
Go down to "data set" and click on Jensen's Alpha. It contains R Squared
for many industries. R Squared gives an indication of how much the movement
of a stock, industry, fund, etc is due to its correlation to an index.
RETURNS: I have enough statistics to fill
many pages but I simply included some numbers for the last 50 years and some
more current. For more numbers, read "What Works On Wall Street" by James
O'Shaughnessy. Numbers, numbers and more numbers. And the reasons why.
RETURN LINK: This is the Pensions
and Investments "International Newspaper of Money Management" and has performance
data on 1,100 Money Managers; rates of return, risk measures and graphical
analysis on 62+ piper styles; more than 90 key benchmarks and access to thousands
of articles. Lots of stuff and a good statistical link.
RETURNS
ON STOCKS, BONDS, T-BILLS LINK: 1928 - Current
RISK ANALYSIS LINK 1:
A free site that compares your fund/stock to various benchmarks and provides
a visual risk analysis.
RISK ANALYSIS LINK 2: Another
free site offering a risk grading based on different criteria covering all
asset classes, regions, and currencies.
RISK ARTICLE: Mandelbrot, Taleb: (Fortune)
Pay real good attention to this. The market is far more volatile than
the "exerts" admit. Certainly those that just use software for allocations.
(and that's just about all of them).
RISKS and OTHER STUFF ABOUT INVESTING: Good
definitions on risk plus lots of other good stuff such as future value of
various investments, bond ratings, DCA, etc. This is a very good overview
of salient issues.
RISK CALCULATOR LINK: A
most unique calculator in that it also addresses standard deviation, efficient
frontier, sharpe ratio, a review of how the new capital gins effects investment
returns, cash flow diagram, balance sheets, bond review, summing a geometric
series and much more. Good for both the average practitioner as well as the
professional. I like it!
RISK COURSE
LINK: from Riskmetrics
RISK MAP
LINK: A visual look at the market by RiskGrades. Both
NASDAQ and the S&P.
RISK
MEASUREMENT LINK:
RISK
AND RETURN LINK 1: The historical experience of six basic domestic
U.S. asset categories- U.S. Treasury bill returns, longer-term U.S.
government bond returns, corporate bond returns, NYSE-AMEX equity returns
and small stock returns.
RISK
AND RETURN LINK 2: by William Bernstein
RISK PROFILE: The
absolutely finest risk profile questionnaire - developed solely
by yours truly- that is GUARANTEED to accurately and definitively
determine your risk profile and tell you exactly which
investments to use. There is simply not a better form in any magazine
or on the Internet, including Vanguard and Fidelity.
RISK QUESTIONNAIRE COMMENTARY: This
form was developed by the analyst firm of Ibbotson, but my comments are
essentially the same whether I looked at those developed by Fidelity, Vanguard
or Your Mama.
RUSSELL
INDEX LINK: The company provides statistics on the Russell 1000, 2000,
etc. along with other countries along with tables that provide good snapshots
as to how a particular segment of the stock market has done over past periods
of time.
S&P/BARRA
STYLE INDEXES LINK: Charts and charts on just about
everything.
S&
P EARNINGS LINK
S&P500
GRAPHICAL INDEX LINK Fed Bank of St. Louis
S&P
INDEXES LINK: Standard and Poors information on their various
indexes.
S&P
INDEX METHODOLOGY LINK: Complete analysis of how the index
works.
SAVINGS BONDS LINK: This
government site has info on buying savings bonds with credit cards, auction
dates on Treasuries, articles on frauds and scams and even a calculator for
figuring out the value on savings bonds, etc. Again, the government does
a heck of a job on WEB site information.
SAVINGS BONDS
ONLINE LINK: But them directly on line
SECTOR SPYDRS LINK: Select
Sector SPDRs are benchmark sector-based equity portfolios (like tranches)
of companies in the S&P 500.
SECURITIES EXCHANGE COMMISSION (SEC)
LINK: Get info on bad agents, access to EDGAR database and more.
SEC INVESTOR FACTS LINK:
The Securities Exchange Commission has am Investor page
for new investors on issues they should review- budget, what is a mutual
fund, retirement and so forth. Acceptable overview, but it's too sophomoric
for any viable planning. Nonetheless, it is a good place to start.
SECURITIES REGULATORS
LINK: This provides information to each states' department that controls
securities regulation.
SHARPE, TREYNOR AND JENSEN RATIOS:
Mandatory review of basic ratios for stocks and funds. You must ABSOLUTELY
know about BILL SHARPE
and standard deviation. Unless you (or your adviser) knows about
standard deviation and how it validates risk, you are out to lunch in investing.
(But did you know that standard deviation is NOT taught in securities
licensing classes?) Better do some homework now. An excellent additional
source is Investments by Bodie, Kane and Marcus.
SHARPE
RATIO LINK: Directly from Bill Sharpe's site. You need to know
what this represents is you consider yourself a sophisticated investor.
SHORT SELLING: Used to make money
when a stock goes down. A very valid tool to use when you own stock you don't
want to sell but need to protect.
SMALL CAP STOCKS: Literally all statistics
refer to the exceptional return of lower cap stocks over mid or large caps.
But this study shows that that may not actually be true.
SOCIAL MUTUAL FUNDS LINK:
The site has "over 1000 pages of strategic content to help you
make informed investment decisions regarding socially responsible
investing."
SOCIALLY RESPONSIBLE
INVESTING LINK: I don't get involved with this myself since I am looking
for the highest return given a certain risk irrespective of other issues.
However, for those that focus on such issues, this could be a good
guide
SORTINO RATIO
LINK: The Sharpe ratio reflects a value that incorporates standard deviation
no matter which way the deviation is calculated in up markets or down. The
Sortino Ratio reflects how a fund has done in a down market. Such downside
risk might be a better indicate of risk for an investor. The study of such
numbers is valid and, in part, absolutely necessary to recognize. Same
with Morningstar. But they reflect what HAS happened which may have little
to do with the future trends, economics or interests rates. Further, looking
at numbers at what you have done when you were clearly in the wrong fund
to begin with is not particularly useful if the poor research did not include
an understanding of economic conditions.
SPIDER
LINK 1: Short article on the difference between the purchase of the S&P
500 in a fund or in buying an arachnid.
SPIDER LINK 2: Info on recent activity
in SPDR's, Technology SPDR and Basic Industries Select Spdr from the American
Exchange.
STAMP LINK: The
site by the American Philatelic Society is for collectors of postage stamps.
As stated elsewhere, I do not recommend stamps as investments- but perhaps
you might have an interest in the vast amount of info offered by this
organization on the subject.
STANDARD
DEVIATION LINK: by William Bernstein
STANDARD DEVIATION AND MONTE CARLO:
A definitive article with charts. You WILL be able to understand
the basics of this fundamental in less than 15 minutes.
STANDARD DEVIATION
AND VARIANCE LINK: From a statistical
viewpoint
STOCHASTIC LONG BOND LINK:
See below
STOCHASTIC ANALYSIS: An "understanding"
of the stomaster by author Jim Grauer. This is difficult reading of highly
technical material regarding the movement of interest rates. You need to
read this before attempting to view his site above (though the commentary
here is offered in more extensive pdf format at this site). Very interesting
and thought provoking
STOCK
ANALYSES GLOSSARIES LINK:
STOCK
GLOSSARY LINK:
STOCK
INTRODUCTION LINK: "Edustock is an educational web page designed
to teach young and old alike", what the stock market is, and how it can work,
mutual funds, crashes, etc. Looks pretty straight forward for the new investor-
though the other areas for individual stock selection should not be attempted
without further education.
STOCK INVESTING: Basic article
covering- guess what?- the basics
STOCK
OPTION LINK: Advice, definitions
STOCK OPTION LINK 2:
Good info including restricted options
STOCK OPTION LINK3
STOCK
OPTION CALCULATOR LINK: For use with Non-Qualified Stock Option Plans.
When cashing in your stock options, how much tax will be withheld and what
is my actual take home amount? This calculator also finds your current stock
price when you enter a ticker symbol. You need to register with
PAyCheckCity.com.
STOCK
PRICES AND YIELDS LINK: (PDF) NY FED
STOCK QUOTE
LINKS : By going to this InvestorGuide site, you simply put in
a stock or mutual fund symbol and you get linked to info for quotes, options,
charts, historical data, profile, news, SEC filings, Balance sheets and
more. You also get linked to Morningstar, Yahoo and others WITHOUT having
to input the symbol again. Quick and neat.
STOCK
RETURN LINK: A semi technical (but good) analysis by James
L. Davis of Dimensional Fund Advisors Inc.
STOCK SCREENER SITES: Investors like sites that provide computer
analyses so they can supposedly pick a portfolio. Below are a number of
free sites. But don't bother to use them unless you already
knew the numbers for diversification and asset allocation. Otherwise you
are kidding yourself with your supposed ability.
STOCK SCREENER LINK-
Reuters
STOCK SCREENER LINK- HOOVER'S:
This free site allows you to enter up to 20 different criteria
for stocks and do a search. Covers about 8,000 stock
STOCK SEARCH LINK: Got
an old certificate and need to know if it has value?
STOCK SPLIT ARTICLE
LINK: A concise article on the mathematics and issues of stock splits
including reverse splits and cash and stock dividends
STOCK SPLIT
LINK: Impending company stock splits
STOCK
STANDARD DEVIATION LINK: from Money Chimp
STOCK VALUE POINT ANALYSIS
LINK: The Value Point Analysis Model is a stock evaluation tool
that allows the "everyday" stock market investor to INDEPENDENTLY analyze
stocks. The user collects data and enters a specified set of fundamental
input factors. These factors should be viewed as a check list that requires
the user to consider the relationship and interactions that these factors
have on each other and the interactive effect that they have on the stock's
calculated intrinsic value, it's Value Point. Interesting if you work with
stocks.
SUITABILITY: "Did a broker have
a reasonable basis for believing that the recommendation was suitable?" Not
if they do not know the fundamentals of investing.
SURVIVOR
BIAS LINK: How the mutual fund industry inflates actively
managed mutual fund performance
TECHNICAL ANALYSIS LINK:
Charts, graphs, recommendations, etc. for those who like to read tea
leaves. I do not use this stuff but, as always, knowledge requires that you
at least be aware of it.
TECHNICAL
ANALYSIS GLOSSARY LINK: Definitions of "head and shoulders", etc.
for those interested in technical trading and analysis.
TECHNICAL CHART LINK 1: I
almost totally utilize fundamental data to analyze investment opportunities-
mainly national and international economics- but this site shows you
the various charts some technical analysts use to predict the market-
symmetrical, ascending and descending triangle charts; wedges, head and
shoulders, etc.
TECHNICAL CHART LINK 2: Enter
a stock symbol and you can see the actually technical charts used for the
company. Easy to use- hard to interpret.
TIME DIVERSIFICATION LINK: (John Norstad ) While the basic
argument that the standard deviations of the annualized returns decrease
as the time horizon increases is true, it is also misleading, and it fatally
misses the point, because for an investor concerned with the value of his
portfolio at the end of a period of time, it is the total return that matters,
not the annualized return. Because of the effects of compounding, the standard
deviation of the total return actually increases with time horizon. Thus,
if we use the traditional measure of uncertainty as the standard deviation
of return over the time period in question, uncertainty increases with
time.
TIPS
LINK: Treasury Inflation Protected bonds
TREASURY
INSTRUMENT LINK: Info on Bills, Notes, Bonds, Strips, Auctions,
Inflation-indexed securities, Treasury direct and more.
TREASURY LINK: This is a private
site that offers "real-time benchmark U.S. Treasury market prices and volume
for all active and off-the-run U.S. Treasury Bills, Notes, Bonds, Basis,
Government Agencies, Money Markets, and Repurchase Agreements."
TREASURY PURCHASES DIRECT
LINK: This is the direct link that "lets you buy Treasury bills,
notes, and bonds directly from the government -- without brokers, without
hassles, and without a mountain of paperwork."
TSA MAXIMUM EXCLUSION
ALLOWANCE LINK: Teachers and other non profit organizations under
Section 403(b) and 501(c)3 are allowed to use pretax money and invest in
tax sheltered annuities (fixed or variable). There is a special formula to
determine how much they can put away. Unfortunately all the annuity companies
seemed to come up with different numbers. Anyway, this is an online computerized
form that "might" be correct.
ULTRA SMALL CAP STOCKS: Short recent commentary
on how well they do versus the rest of the marketplace
UNIVERSITY
OF OHIO FINANCE DATA FINDER LINK: A direct link to innumerable finance
pages internationally. Not for the faint of
heart....lungs....intestines....
USA
TODAY INTERNET 100 INDEX LINK: The USA TODAY Internet 100 is a
capitalization-weighted index that consists of the E-Consumer 50 and the
E-Business 50. It also reflects seven specialized sub-indexes of the Internet
economy. The indexes are benchmarked at 100 as of June 30. The components
are updated quarterly.
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