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Ch. 13: Managing Your Own Portfolio
Terms in this set (17)
a scheme that involves dividing one's portfolio into various asset classes to preserve capital by protecting against negative developments while taking advantage of positive ones
Asset Allocation Fund
A mutual fund that spreads investors money across stocks, bonds, money market securities, and possibly other asset classes.
asset allocation plan in which a fixed percentage of the portfolio is allocated to each asset category
asset allocation plan in which weights for each asset category are adjusted periodically based on market analysis.
the procedures used to select the specific securities to be held within an asset class.
tactical Asset Allocation
asset allocation plan that uses stock-index futures and bond futures to change a portfolio's asset allocation based forecast market behavior.
Active Portfolio Management
building a portfolio using traditional and modern approaches and managing and controlling it to achieve its objectives; a worthwhile activity that can result in superior returns
A measure of portfolio performance that uses the portfolio beta and CAPM to calculate its excess return, which may be positive, zero, or negative.
the process of selling certain issues in a portfolio and purchasing new ones to replace them.
a measure of portfolio performance that measures the risk premium per unit of total risk, which is measured by the portfolio standard deviation of return.
a measure of portfolio performance that measures the risk premium per unit of undiversifiable risk, which is measured by the portfolio beta.
a formula plan for timing in investment transactions, in which the investor establishes a target dollar amount for the speculative portion of the portfolio and establishes trigger points at which funds are transferred to or from the conservative portion as needed to maintain the target dollar amount
a formula plan for timing investment transactions, in which a desired fixed ration of the speculative portion to the conservative portion of the portfolio is established; when the actual ration differs by a predetermined amount from the desired ratio, transactions are made to rebalance the portfolio to achieve the desired ratio.
a formula plan for timing investment transactions, in which a fixed dollar amount is invested in a security at fixed time intervals.
mechanical methods of portfolio management that try to take advantage of price changes that result from cyclical price movements.
a formula plan for timing investment transactions, in which the ratio of the speculative portion to the total portfolio value varies depending on the movement in value of the speculative securities; when the ratio rises or falls by a predetermined amount, the amount committed to the speculative portion of the portfolio is reduced or increased, respectively
the situation where a stock temporarily drops in price and then bounces back upward.
THIS SET IS OFTEN IN FOLDERS WITH...
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