Category: Technical Investors
I am a CPA Candidate sharing my experience building my portfolio while in my 20s. During this process of sharing information online I hope to increase free financial literacy access for all.
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3 Reasons Why Illiquid Assets Can Be Good for Your Overall Portfolio
In today’s investment landscape, portfolio diversification extends beyond traditional stocks and bonds. Many investors overlook the potential benefits of adding illiquid assets in private markets to their financial strategy. These investments, which cannot be quickly converted to cash without potential loss of value, offer unique advantages worth considering. Illiquid assets can help diversify your portfolio…
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How to Understand Credit Spreads in Bonds?
In the complex world of financial markets, credit spreads serve as crucial indicators of risk perception and economic health. When you examine credit spreads, you’re looking at the difference in yield between two debt securities with similar maturity dates but different credit ratings. Credit spreads represent the additional yield investors demand as compensation for taking…
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How to Structure a Portfolio of Alternative Assets (+$50M)
We previously covered JP Morgan’s analysis of family office portfolios, and they showed that on average, the wealthiest families invest 50% of their entire portfolio in alternative assets. So many aspire to build their wealth to be like these families, having tens or even hundreds of millions of dollars in assets, but wonder how they…
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What Is Credit Default Risk and How Can You Mitigate It In Your Portfolio?
Credit default risk is a crucial concept for anyone involved in lending or investing. It refers to the chance that a borrower won’t be able to make the required payments on their debt obligations. This failure to pay can affect the investor or lender’s financial health and decision-making process. Understanding this risk can help you…
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What Does Hurdle Rate Mean?
Understanding financial terms can be challenging, but it’s crucial for making informed investment decisions. The hurdle rate is the minimum rate of return that an investor expects to earn when deciding if an investment or project is worth pursuing, or if resources should be allocated elsewhere. For businesses, setting an accurate hurdle rate ensures that…
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How Does Option Wheeling Work?
Understanding “Option Wheeling” can be tricky, but it doesn’t have to be. This strategy involves selling put options to possibly buy stocks at a lower price. Once you own the stocks, you sell call options to generate income. This cycle continues, creating a wheel of potential profit. Option wheeling allows you to earn income from…
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Family Office Portfolio Allocation Data
When it comes to managing significant wealth, a family office has become the gold standard for the ultra-wealthy. These entities, often private firms established to manage and preserve the wealth of affluent families, are known for their tailored approach for the family’s goals. One of the critical aspects of their operations is asset allocation, a…
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What is Reinvestment Risk and Why is it Important?
Reinvestment risk is a critical concern for anyone invested in debt securities or who have positions they are going to exit with a high return. It refers to the risk that an investor will not be able to reinvest their income or capital at the same rate of return as their original investment. This risk…
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What Is Currency Risk and How can You Hedge Against It?
Currency risk, also known as exchange rate risk, arises from the change in the price of one currency against another. Currency risk mainly affects businesses and investors who engage in international trade or hold assets in foreign currencies. Understanding currency risk helps businesses make better financial decisions, ultimately protecting their profits. Businesses that operate globally…
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What is Behavioral Risk and How Can You Avoid It?
Behavioral risk in personal finance refers to the potential for irrational decision-making influenced by psychological biases. Behavioral risk is the risk you make choices that are not in your best financial interest, such as panic selling during a market dip or ignoring long-term plans. Understanding and recognizing these biases can help you make more rational…