No change to my plan (next Monday):

I) Decrease exposure to Titanic i.e., taking profit,

II) Top up Ponzi 2.0 to take advantage of its temporary weakness.

III) Top up Small-cap; this is routine DCA.

Xuzen

kenapa muka macam ini?

Lai lai... I give you some eye-candy: Viet moi!

Xuzen



Attached thumbnail(s)

The average rate return of Ponzi 2.0 over a three year period is 16.97% p.a.

the fund YTD is 7.26%.

The standard-deviation is 8.24%

This means that as of now; the fund YTD rate of return is below one standard deviation. This means that with 95% confidence, there is more than 67% probability that the fund will move towards the average point.

If you are a gambler, would you money down on such chance?

Xuzen

satu tahun = 17%, no bad right?

titan is > 20%

small cap > 30%

Xuzen

Noted & Thank you.

Like those go to car show room ask a lot of questions, test drive every models, drink the free 3-in-1 Coffee and free doughnuts / sandwich. But when salesman ask him to talk about financing, quickly run out the door.

Xuzen

You sounds like a person who knows a little bit about MPT.

Here's an imaginary portfolio:

Three funds:

I) All three funds have Risk to Reward Ratio is > 2

II) All three funds corr-coeff is around 0.50 to 0.60

Good boh?

Xuzen

This post has been edited by xuzen: Dec 5 2015, 04:44 PM

Lock up mana? Geneva Gold? Pegasus bullion?

Xuzen

Amanah Saham TAK Gemilang LOL

Point 1: I have never been bullish about European centric fund. You have mistaken me with itu Labah-labah Merah Jambu.

Point 2: I took profit from Tech Sector about three mths ago and moved into Titanic. Now I am also taking profit from Titanic. These two funds at the moment behave very similarly. They can be said to have very high correlation to each other.

Point 3: India centric fund; I am watching it but as of now I have not put in a single cent into it. Its risk to reward ratio is just not favourable. I still prefer Small-cap as my supplementary fund over India fund.

Xuzen

This post has been edited by xuzen: Dec 7 2015, 10:47 AM

Search back my previous post: I have explain it before not too long ago. See page 104; post #2080.

Xuzen

Ramjade aka ASx fanboy...


If you say put RM 5,000.00 into it; and withdraw it less than one year before they declare dividend, will you still get the pro-rated dividend?

Xuzen

Eh... like this can use ASx as a hedging mechanism.

When market SH1T, masuk ASx...

When market H4WT, masuk FSM.

Fuyoh.... like having a wife and still get to be a Playaz!

Xuzen

1) My caveat is that don't dump everything in.

2) It is still risky. You can put in a little, something you can expect to lose as a trial to test your own psychology / risk appetite.

3) The above is but a small part of the whole Modern portfolio theory thingy. There are many parameters to consider behind the calculation of Algozen™: Xuzen's asset allocation algorithm.

Xuzen

Like this ar.... need to depend on luck some more wan ar?



Xuzen

But but but... once you keluar you got money also cannot masuk lagi according to fanboy Ramjade. So this strategy although in theory sounds good, in reality... SUXS!

Xuzen

p/s cannot in-out-in-out; only can go in and stay there. No syiok wan!

This post has been edited by xuzen: Dec 7 2015, 04:35 PM

I usually talk abt it in FSM; stay a little while longer in FSM thread and you may get the flavour of it. Helps if you are financially trained.

Xuzen

Maximum return with minimum risk, i.e., The Holy Grail of Investing. Trying to steal a free lunch from capital market.

Here is how. I'll use real life example.

Take two fund;

i) RHB cash management fund at 3.7% p.a. with a standard deviation aka as volatility aka risk is 1% (Anything less than 1% can consider almost risk free liao for retail investors)

ii) CIMB - Global Titan Fund aka Titan at 21.00% p.a. with stan-dev of 8.29%

NB: I got these figures from their respective Fund Fact Sheet hence I am not using make belief values.

The rate of return is % of Titan + % in RHB-CMF = 100% or 1.00, or W(titan) + W(cmf) = 1.00

The combined volatility of both Titan + CMF is not linear but given by the formula:

= Std-dev(portfolio, p) = [(W(titan)^2 x W(cmf)^2) + (2 x W(titan) x W(cmf) x Std-dev of titan x Std-dev of cmf x corr-coeff btw Titan-cmf)] ^ 0.5

Now look at the formula again: we know that the std-dev of cmf is very small (negligible) and cmf correlation coefficient to Titan is zero.

The formula then simplified to Std-Dev, p = [W(titan) x std-dev of titan]

the risk to reward ratio of of Titan alone = 21 / 8.29 = 2.53

If you take a portfolio of half titan + half cmf; the return is 0.5 x ( 3.7 + 21 ) = 12.35% p.a

The std-dev is 0.5 x 8.29 = 4.145

Hence the portfolio risk to reward ratio now becomes = 12.35 / 4.145 = 2.98

This means that by sacrificing the return, our portfolio become more stable i.e, from 2.53 to 2.98.

This is a very simplified way of explaining modern portfolio theory. If real life, you will have more than two funds and their corr-coeff is not zero, you will need to use algorithm programming to do it.

Xuzen

Take home point: That is why when choosing a good portfolio, we want funds that have low std-dev or and their corr-coeff must be low.

Ha ha ha betul... kasi lu satu like!

Xuzen

yes, and I need to give credit where credit due. It was Vanguard who told me can get these info from Morningstar. Before this I have to bug insider periodically for these "special" data.

Xuzen