Simply stated, alpha is often considered to represent the value that a portfolio manager adds to or subtracts from a fund’s return Alpha is one of five technical risk ratios; the others are beta, standard deviation, R-squared, and the Sharpe ratio. These are all statistical measurements used in modern portfolio theory (MPT). All of these indicators are intended […]
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Mutual Fund A mutual fund is an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund’s capital and attempt to produce capital gains and income
A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), a model that calculates the expected return of an asset based on its beta and expected market returns. It is also known as “beta
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The Long/Short investment strategy is used primarily by hedge funds, and involves taking both long and short positions. A long position is one in which the trader wishes for the price of the stock to increase and therefore the trader will make money by selling the stock at more than he bought it for. On
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Average Annualised Returns: Pure Alpha, annual return of 15% before fees over the last 18 years. Ray Dalio bought his first stock when he was twelve years old. It was the early 1960s and since he worked as a caddy he overheard all the golfers talking about the boom in the stock market. He bought shares
