Do any of you guys calculate the ‘efficient frontier’ to optimise your portfolio to get the maximum return obtainable for your acceptable risk
Or is just seat of the pants stuff or just gut feel and then hope like hell it’ll all be OK
Printable View
Do any of you guys calculate the ‘efficient frontier’ to optimise your portfolio to get the maximum return obtainable for your acceptable risk
Or is just seat of the pants stuff or just gut feel and then hope like hell it’ll all be OK
Doubt many have even heard of the efficient frontier or understand the efficient market hypothesis and risk adjusted optimum portfolio allocation mate.
I use gut feel and I have learned from past experience never to be so sure of the future as to place too big a bet on any particular company. Sure some of the wealthiest investors in the world got rich by having a very concentrated investment approach and you can read all about them but the funny thing is you never hear of the millions who took an aggressive approach to investment and lost their shirt do you ?
Some people can afford to take big risks, (some even thrive on the adrenalin rush of it), and can live with the outcome of a potential major loss to their portfolio either because they have more than they need already or because they have sufficient time to recover their portfolio before retirement...for the rest of us I think a more balanced approach makes more common sense.
Each to their own though and good luck to all holders large and small.
I wonder if people approaching retirement don't worry to much about recovering losses before they retire,as they have kiwisaver to fall back on.
If only I'd been all in on A2, would've been a nice, early retirement.
I have found that even fund managers, great traders and intelligent investors make big mistakes and losses. Either they sell too early and buy too late. They also choose wrong type of investment or trading. There are investors they sell stocks with frustration after keeping for a long time. Then they miss the biggest gain in their investment. Too much trading also could lead to poor results. Putting all eggs in one basket is very risky. Exception is we find a multibagger company. Successful investors have succeeded by putting their money in investment that they knew supremely well.