The paper "Risk-Adjusted Performance Measures - NASDAQ" is a perfect example of a micro and macroeconomic case study. This paper aims to critically look at a portfolio performance in comparison with the market. The study also looks at the various principle of asset allocation imperatively applied in the task of asset allocation. Asset allocation entails making a choice of the proportion of the assets which will be invested in each identified class of the assets. There is a range of classification in which each given asset will fall. The stock should only be sold at the end of the investment horizon.
The paper also observed that when most stock leads to a loss, however, it would be appropriate to sell the stock immediately if the value is equal to the buying price. Trading strategies In total I have made 78 transactions however between the period 2008 September 2013, I had not made any transaction because I had decided to observe the performance of the shares. My last transaction was on 24th Sep 2013 where I made a number of selling and buying which led me to make an overall loss of 24,336.72 which is equivalent to a negative return of 24.
34%. In the earlier periods, I engaged in overtrading which led to the loss since then I stopped trading and the frequency of trading was zero. If I could have engaged in further trading then the following could have been the gains and losses for the four weeks. After 4 weeks the final portfolio weight changed because of the activities that took place in the market. From the final portfolio weight, it appears that some of the stocks lost their value during the past 4 weeks.
That is the reason why the portfolio value decline. This is the main reason why portfolio selection and diversification is important. The diversification benefit does depend on the time period over which returns and variance are calculated. Some of the riskiness associated with individual assets can be eliminated by forming portfolios. The process of spreading an investment across assets is called diversification. The principle of diversification tells us that spreading an investment across many assets will eliminate some of the risks.
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