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Invest in passively managed index funds, not actively managed mutual funds.

A constant theme of mine for individual investors.

Today, a short video courtesy of The Motley Fool. 

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Compare Performance to Peers

On 05/18/2011, in Investment Strategies, by Jordan Wilson

If you create a portfolio of individual stocks and bonds, it may be unique to you.

Creating a benchmark may take a little work.

If your invest in index funds, you will be able to easily find a relevant benchmark.

But I suggest you do not stop there in comparing your portfolio performance.

A great way to assess fund performance is to also compare results against the fund’s peers. 

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Portfolio Benchmarks

On 05/04/2011, in Investment Strategies, by Jordan Wilson

You should review your portfolio periodically.

But what should you look for?

Portfolio performance is one key area. Both income and capital gains.

To assess performance, a benchmark to compare your results is required. 

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Over the last few months we have covered a lot of investment related information.

Compound returns, diversification, asset correlations, risk, return, investor objectives and constraints, and a whole lot of information on the core asset classes.

And that is just a sample.

But we have not really got into the creation and management of investment portfolios.

We will start that today.

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The Keys to Passive Investing

On 11/02/2010, in Investment Strategies, by Jordan Wilson

Okay, so hopefully we agree that passive investing is generally the best route for individuals wanting to invest over the long term.

This post outlines the steps to build a passively managed portfolio that meets your needs.

We will flesh out some of these steps in November.

There are three keys to passive investing.  

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Passive and Active Investing

On 10/22/2010, in Investment Strategies, Mutual Funds, by Jordan Wilson

We will look at the active versus passive management debate.

Today we shall differentiate the two strategies.

Then we shall shall see if one strategy is preferable when investing.  

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Fund Performance is a Relative Concept

On 09/28/2010, in Mutual Funds, by Jordan Wilson

Investment returns are difficult to assess in isolation.

What does it mean if an asset has an annual return of 10%? Is it good, bad, or average?

To answer that, results must always be placed in context to be of any informative value.

That brings us to the topic of relative performance.

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Assessing Investment Returns

On 06/19/2010, in Investment Concepts, by Jordan Wilson

In our first look at investment returns, we reviewed a few common return calculations.

If you know the formulas, the calculations are quite simple. The key is to know what is included and excluded from the different returns.

But even with the hard calculations, returns can mean different things to different investors.

Today we will consider some of the qualitative aspects in evaluating investment returns.

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