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Precious metals have primarily been useful as a stable store of value, not a way to make a profit The best argument in favor of precious metals has generally been that they hold their value against inflation while being hard to manipulate by governments/central banks/currency traders/etc. But that's not an investment - that's just a store of value. There's ...


6

Gold stocks (and ETFs and mutual funds comprised of gold stocks) are a reflection of the price of gold during that period. There are years when they are the best or near best performers among all funds. There are years when they are the worst or near worst performers. There are years when they are the just blah and trade in a box. You can see this by ...


4

OTM protective puts are like a traditional insurance policy. You have a cost and you have a deductible. In the case of puts, the deductible is the underlying's current value less the strike price. The total of the two is your potential loss at expiration. ATM hedging one year out with SPY puts costs about 6%, more if you use earlier expiries. Hedging ...


3

If you expect the interest rates will decrease in the future, then think about it this way: You buy a bond for 5 years that gives you a 5% interest rate. You're assuming that 2 years from now the interest rate will be about 2%. After 2 years, if you were right, your bond will be worth much more than the bonds with the 2% interest rate. People will be ...


3

You can just subtract the fee from your expected return. So for the first fund, your expected return would be 6.95%, anf for the second your expected return would be 6.00%. Then just use normal compounding formulas to calculate an expected value over 15 years (but see below) Generally, the expected return of actively managed funds needs to be higher than ...


3

“There are no magic numbers in trend following", written by Norman Fosback wayyy back when. Moving averages (MA) are just lines on a chart based on arbitrarily chosen numbers. The longer the MA, the less noise and the fewer the number of whipsaws. In return for that benefit, your trade execution will be late and by the time you act, your position may ...


3

VTSAX uses the CRSP US Total Market Index. At http://www.crsp.com/indexes-pages/crsp-us-equity-indexes-methodology-guide you will see a download named "The CRSP U.S. Equity Indexes Methodology Guide" as well as highlights showing the goals, several of which are related to weighting (allocation): Breakpoints based on cumulative market capitalization ...


3

The whole point of the All Weather Portfolio (AWP) is that it provides both protection and growth opportunities in "all" (or at least many) economic conditions. I don't particularly think the mix in the original portfolio is the best, but it's an interesting starting point for a low-risk, long-term portfolio resistant to economic shocks. If you are ...


3

The total is still 100% - the 20% short offsets the "extra" 20% long you are. In your example, it means that you start with 100% Exxon stock, short 20% of that value in IBM stock (which nets you cash but you owe someone stock), and use the proceeds to buy another 20% of Exxon stock. Here's what your professor means by "leveraging" (we'll skip efficient ...


2

There are various comparison tools available. My broker offers a Mutual Fund/ETF Replicator tool that suggests alternatives with lower fees. There are various internet tools as well. Here's an example of one at:https://www.etfrc.com/funds/overlap.php It indicates that the SPY has 505 holdings, VOO has 512 holdings and that there are 503 ...


2

Interestingly the answer to this question is very similar to the answer of the other question you asked. You should probably invest in the companies you were going to invest in right now, because chances are the market is going up from here. And also your question implies that your investment horizon is very far away so the day to day fluctuations of the ...


2

In the simplest case, let's say I need to pay you $100 in 10 years. If I buy $100 face value of a zero coupon treasury bond maturing in 10 years, I would be able to use the payment from the bond to pay you back. The date I would receive payment from the treasury (maturity) matches the date I owe you. No matter what interest rates do between the time I ...


2

The bonds which react the most to changes in interest rate changes are the ones which mature the furthest in the future.


2

Buy and hold is actually a terrible strategy, generally speaking for the average investor. The main and most famous proponent of Buy and Hold is probably Warren Buffett. But he doesn't just advocate buy and hold.. He also advocates careful and deep research, before making that said "buy and hold" investment. Even then, among his investments only a few ...


1

I like Sharesight.com, it lets you track up to 10 funds and splits things out nicely by equity gain, currency gain and dividend gains. Yahoo portfolios are also okay, but they don’t show dividends.


1

The answer is incorrect, or at least severely simplified. Consider what happens if you expect market rates to decrease by 2% and everyone else is expecting them to decrease by 3%. Then long bonds will fall in value, if your expectation was correct. The key here is that investing in long bonds makes sense only if you expect market rates to decrease more ...


1

The fundamental problem with investing in precious metals is that the price is entirely driven by supply and demand. By the definition of "precious," none of the product is permanently consumed. In the case of gold, most of the "consumption" is jewellery manufacture, and as the far eastern countries' economies develop and gold jewellery ceases to be the main ...


1

Volatility is measure of the price dispersion of a security. It has nothing to do with the market price of the security or portfolio. As for P&L, in terms of gross profit, if I told you that a portfolio's gain was $10k, how would you know whether it was a a $10k portfolio that doubled or a $100k portfolio that went up 10% (the same $10k)? In terms ...


1

There's a few problems with your approach (some mentioned in the comments): 5 stocks won't be enough to replicate an index. Price-weighting is an obsolete index approach, so it's not worth trying to replicate such an index. Generally, capitalization-weighting is the most common/representative/cheapest. Investing only in Argentinean stocks would be very ...


1

Mark-to-market accounting is needed. Just regularly update the intermediate value of the options and compare gain/loss to the beginning year balance. However, it's necessary to allow for deposits and withdrawals. For instance, deposit is not gain and withdrawal is not loss. Also, the effect of a large deposit or withdrawal can immediately change the ...


1

I would recommend putting the investment in six-month duration bonds. Then every three to four months move 10% of the investment into a position that has been found to be interesting. This slow-roll can find both growth positions and macro positions relevant to current economic conditions. Once the entire investment is placed the investor might allow ...


1

Depending on the articles you read, they are either talking about naked puts (where you don't own the underlying stock.index) or protective puts (where you do). They are very different strategies. Naked puts are either speculating about the future direction of the equity (meaning you expect it to go down) or buying "cheap" puts and hoping to get lucky. The ...


1

However, does it make an sense to calculate the beta for a currency, bond or commodities? All my prices are in USD, so can i for example use the NYSE as my index for them? Yes you can calculate beta on investments other than equities, but using the NYSE as a benchmark is not a great choice, since there's not as much correlation between them. You probably ...


1

Retirement portfolios have two phases: an accumulating phase where you are saving money and a consumption phase where you are using up the saved money. During the accumulating phase you are saving money every month and you are looking for the greatest growth possible. This is achieved by having a stock heavy portfolio with a few or no bonds. Since this ...


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