Say I want to manage my own portfolio of stocks or funds, which key indicators should I primarily look for? To me there are few, although I'm not sure they are the most relevant:

  • Sharpe ratio
  • Volatility
  • Correlation between stocks/funds
  • Financial "viability" of firms

What indicators does a portfolio manager look for? Are there any simple reference material, softwares or tools that I could use to build my own portfolio?


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    Did you just read a book on financial ratios ? What is your timeline for your portfolio ? What is your target ? To create a portfolio everything needs to be considered. Not only the company's profile you want to invest in. – DumbCoder Sep 26 '15 at 13:42
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    The simple approach is not to try playing the game at this level and go with index funds, investing in wide bands of the market rather than trying to pick individual stocks. Betting with the industry isn't exciting, but it works well enough and requires almost no effort or attention. – keshlam Sep 26 '15 at 16:52
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    Are you looking to have a portfolio of individual stocks or a portfolio of funds? They are 2 different things. And why would you have a portfolio of funds when someone else is already managing the fund? Are you looking just at fundermental analysis or would you look at technical analysis as well? – user9822 Sep 26 '15 at 22:38
  • If you would begin with defining your situation (age, risk tolerance, income, investing experience, taxable/non-taxable, etc.) and your objectives (growth, income, sector focus/avoidance) you would find more resources. Portfolio managers use different "key" tools for different objectives, though it appears from the question this is not obvious to you. – michael Sep 27 '15 at 0:47

Rather new here - I dabble mainly on the Quant/Math forums. The simple answer is that indicators (Sharpe, volatility, ect. are probably better classified as statistics) are mostly useless - past information rarely influence future results. If your horizon is long term, then you may wish to trust that the market has positive drift in the long run. However, passive investing can suffer from large and long drawdowns - erasing returns that take years to build. Some active strategies are effective because they in some sense "provide a service". You can sell iron condors (betting the underlying will stay between two prices) in almost any account since the risk is defined. This is a nice income generating strategy. You can also look towards some basic ways of lowing basis on underlyings that you have a positive directional bias for by selling calls or call spreads against this position.

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