Web Sites for Optimizing Your Portfolio

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Modern portfolio theory (MPT) introduced the concept of portfolio “efficiency,” which focuses on the portfolio as a whole and how the individual holdings interrelate. An efficient portfolio is more than just the sum of the individual holdings. Through proper diversification, risky assets can be combined in a portfolio to achieve higher returns without taking on additional risk, or to reduce risk in a portfolio without reducing return. The key is selecting portfolio components that work together in combination to achieve this. And to help in this analysis, “portfolio optimizers” were born. Portfolio optimizers are basically asset allocation models that help you select the right combination of investment vehicles that will maximize your return while minimizing your risk.

Where on the Web can you go to find these tools? Listed below are several current sources for asset allocation advice found on the Web—some are free and others charge a fee.

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