A 7-year $1.3 billion hedge fund manager Chelsea Brennan shares her investment advice.

Laura Hermes

2018-10-05 10:38:00 Fri ET

A 7-year $1.3 billion hedge fund manager Chelsea Brennan shares her investment advice. Her advice encompasses several steps toward better financial literacy and freedom. From better retirement to superior socioeconomic status, each investor should understand his or her multi-year investment goals. For financially free and secure retirement, many investors focus on steady cash dividends, whereas, other investors seek healthy capital gains. It is important to keep a multi-year perspective to strike a better balance between these investment goals.

Also, it is easier to optimize average asset returns against multiple investment risks via multiple index funds. Each smart investor needs to diversify across U.S. and international index ETFs in stocks, bonds, currencies, commodities, REITs, and mutual funds etc. In practice, diversification allows him or her to boost the Sharpe ratio from the U.S. stock market benchmark of 0.33-0.35 to 0.63-0.85. The Sharpe ratio often constitutes 10% average asset return as the numerator and 30% return volatility as the denominator for the U.S. stock market benchmark.

Multi-asset portfolio optimization boosts 10% average asset return to at least 15% and then reduces 30% return volatility to 20%. This dynamic asset allocation helps ensure a better reward-risk Sharpe ratio near 0.75 or the mid-point of the healthy target range.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Business leaders inspire teams to reach heights of both innovation and profitability with great corporate purpose.

Apple Boston

2020-08-26 10:33:00 Wednesday ET

Business leaders inspire teams to reach heights of both innovation and profitability with great corporate purpose.

Through purposeful leadership, senior managers inspire teams to reach heights of both innovation and profitability with great brand identity and customer lo

+See More

New computer algorithms and passive mutual fund managers now run the stock market.

Joseph Corr

2019-11-17 14:43:00 Sunday ET

New computer algorithms and passive mutual fund managers now run the stock market.

New computer algorithms and passive mutual fund managers run the stock market. Morningstar suggests that the total dollar amount of passive equity assets re

+See More

Saudi Aramco unveils the financial secrets of the most profitable corporation in the world.

Jacob Miramar

2019-04-13 14:28:00 Saturday ET

Saudi Aramco unveils the financial secrets of the most profitable corporation in the world.

Saudi Aramco unveils the financial secrets of the most profitable corporation in the world. In its recent public bond issuance prospectus, Aramco offers the

+See More

Main reasons for share repurchases

Apple Boston

2022-09-25 09:34:00 Sunday ET

Main reasons for share repurchases

Main reasons for share repurchases Temporary market undervaluation often induces corporate incumbents to initiate a share repurchase program to boost the

+See More

Investing in stocks is the best way for people to become self-made millionaires.

James Campbell

2019-06-25 10:34:00 Tuesday ET

Investing in stocks is the best way for people to become self-made millionaires.

Investing in stocks is the best way for people to become self-made millionaires. A recent Gallup poll indicates that only 37% of young Americans below the a

+See More

Eric Posner and Glen Weyl propose radical reforms to resolve key market design problems for better democracy and globalization.

Chanel Holden

2023-02-14 09:31:00 Tuesday ET

Eric Posner and Glen Weyl propose radical reforms to resolve key market design problems for better democracy and globalization.

Eric Posner and Glen Weyl propose radical reforms to resolve key market design problems for better democracy and globalization. Eric Posner and Glen Weyl

+See More