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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Practical
Investment Theory and Application 2008
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 RATES
LINK: All the current rates from the FED
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
LINK 7
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
EQUITY INDEXES LINK Excellent statistics
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.
U.S.
MONETARY POLICY LINK: A great introductory article by the FED
Board of San Francisco. How the FED is structured, who makes policy,
how does it affect the economy and much more. Mandatory reading for
investors. If you do not understand the basics of economics and how it
effects what you are doing, you are not an investor.
U.S. SAVINGS BOND
LINK: All the info you need from the Treasury Department
UTILITY
CALLS: Most bonds have calls (see glossary). But there are calls
and then they are calls.
VALUE POINT ANALYSIS LINK:
The (VPA) model, that allows you to evaluate the intrinsic value of
stocks.
VALUE
AT RISK LINK: (VaR) is a tool for measuring financial risk used by
major bank and nonbank financial institutions and many nonfinancial
firms.
VENTURE
CAPITAL LINK: The National Venture Capital Association "dedicated
to defining, serving and representing the interests of the venture
capital and private equity industries and works to stimulate the flow
of risk equity capital to emerging and developing companies." I do
not expect readers to be directly involved with venture capital, but
this might be a good place to get an understanding of what it can do
and how.
VOLATILITY
LINK: Good overview
VOLATILITY/TIME
HORIZON LINK Actual chart to measure
WILSHIRE
INDEX LINK: This site covers the Wilshire 5000, 4500, small cap,
real estate and more.
WORLD
BANK LINK: This organization loans to many countries (many
third world) and can have a substantial impact on their growth- though
it is not without controversy. Why is this here? Because maybe they are
loaning funds to a country that you are going to invest in and you may
need to know more.
WORLD
FACTBOOK LINK: A CIA government site and this one is jammed packed
with all sorts of worldwide information of all types- population,
infrastructure, GDP's. Essential for looking at foreign economies.
WRAP
ACCOUNTS: Personally, I don't care for these since they really
don't consider asset allocation. And they still cost too much. But here
are the definitions and commentaries from various sources over the last
couple years to help you make up your own mind.
YIELD CURVE: This
info from the Fed Board of New York might help to indicate when the
market /economy might change. It might be one of the better leading
indicators
YIELD CURVE
LINK:
The site shows the current yield curve and recent rates on Treasury
Bills, Bonds and Notes.
YIELD CURVE LINK 2: Good
definition and examples
YIELD
CURVE LINK 3
YIELD
CURVE LINK 4: The difference between
long-term and short-term interest rates ("the slope of the yield curve"
or "the term spread") has borne a consistent negative relationship with
subsequent real economic activity in the United States, with a lead
time of about four to six quarters. The measures of the yield curve
most frequently employed are based on differences between interest
rates on Treasury securities of contrasting maturities, for instance,
ten years minus three months. The measures of real activity for which
predictive power has been found include GNP and GDP growth, growth in
consumption, investment and industrial production, and economic
recessions as dated by the National Bureau of Economic Research
Yield
Curve Rates Daily Treasury
ZERO COUPON
BOND LINK: Zero coupon bonds do NOT pay annual interest. You buy
these at a discount and they mature at a point in time. Very volatile
in between.
ZERO
COUPON MUNICIPAL BOND LINK: With a regular zero, you still
have to pay taxes on interest accrued even though you do not receive
any. The municipal can alleviate that problem.
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