ask Dcifrths...well, anything...about finance/mkts/ports that is.

[Newt_Buggs]

Hh come on, its not like its your fault that I'm ignorant. I really appreciate the help and maybe some day when I have more knowledge and experience this is something that I can look into more and add to my portfolio.

[DcifrThs]

[ QUOTE ]
Hh come on, its not like its your fault that I'm ignorant. I really appreciate the help and maybe some day when I have more knowledge and experience this is something that I can look into more and add to my portfolio.

[/ QUOTE ]

well, there are 3 things you can do. and i don't think you're ignorant.

1) ask your financial advisor to hedge your int'l equity exposure (a long ass post ont his i think is towards the front of this thread)

2) add CCFs (collateralized commodity funds) in a small amount to your portfolio. this should be relatively easy and cost a minimal amount (they are funds that take a "100% allocation" and invest some amount in US treasuries and the rest in a commodity futures exposure. the UStreasury investment brings down the overall volatility of that investment, while still preserving the diversification benefits of commodities)

3) get leveraged global TIPS in your portfolio.

Barron

[danzasmack]

Dcifr,

In 45 days someone is going to give you a large some of money to invest. You understand economics well and have a strong grasp of higher level mathematics. However, you have been out of the loop as far as financial markets goes.

What is your plan of action?

[DcifrThs]

[ QUOTE ]
Dcifr,

In 45 days someone is going to give you a large some of money to invest. You understand economics well and have a strong grasp of higher level mathematics. However, you have been out of the loop as far as financial markets goes.

What is your plan of action?

[/ QUOTE ]

what do you mean by "invest"?

do you mean you want to start trading securities in a actively managed portfolio?

or do you mean you want to construct a passive portfolio to yield the highest sharpe ratio possible?

thanks,
Barron

[danzasmack]

actively managed

[DcifrThs]

[ QUOTE ]
actively managed

[/ QUOTE ]

i'm trying to put myself in the shoes of somebody who is smart and has a foundation in economicsand wants to invest.

the first thing i'd do is learn about how to construct a portfolio (you need to be good at excel or matlab for this to test/play around).

you said you had strong econ background, but how are your math skills? and how much finance do you know (i.e. equity pricing? bond pricing? yield curve basics? Etc.)?

if all of that is solid, you're probably on a good track.

concurrantly to learning how to structure a portfolio of bets, you should also spend time every day catching up on what has been going on (i.e. read the fed's Q2 economic summary front to back) and read all the business/finance sections of the economist and comment/analysis of financial times (that have some relavence to markets).

then i'd start to outline where you think the world is heading. this is hard and takes time and work but you can do it. i start with fixed income in the US, UK, etc. and work out from there but you can start w/ equities or wherever. all markets play in together and there are typically some mispricings in every market...finding the ones worth investing in or the most aggregious shoudl be your job.

then once you have a few ideas, start small and open an account at interactive brokers.com

keep your daily VaR (not the best measure, but decent enough) to a very small level relative to your bankroll. so if you have 100k, maybe start with 3k in daily VaR. this might be tough since futures contracts require thousands in margin but daily moves on your portfolio shouldn't be huge (ideally you have uncorrelated positions or lowly correlated positions...here it helps to have diff bets, or relative value trades, since they don't correlate with directional bets and are typically less risky)

then incrementally add trades and manage the ones you have.

easier said than done but thats what i'd do if i were you.

or you can pick one market to invest in (say commodities or fixed income) and study the hell out of that and build a solely that market portfolio.

hopet his helps,
Barron