Station 5: Understanding Portfolio Construction (UI+)

Description

Understanding Portfolio Construction is where all the concepts introduced in Modules 1 to 4 come together. In a portfolio, risk and return take on new characteristics and asset classes begin to behave differently than when they were in isolation: normally volatile stocks can exert a moderating influence, while steady bonds can emerge as a catalyst for change.

Asset classes behave differently in a portfolio setting. Your preferences as to which you hold, in what combination, and for how long add yet another dimension to the complexity.

Modern Portfolio Theory (MPT) describes these transformations, interactions, and permutations in the context of an investment portfolio. One peculiarity is that adding a risky asset to a portfolio can actually reduce overall risk, which for many seems counter-intuitive. Another key insight is that a portfolio containing two or more risky assets can be engineered to maximise return for a given level of risk, or minimise risk for a given level of return. There is only a finite set of portfolios that can be constructed this way, and collectively these trace out a curve referred to as the Efficient Frontier.

To add to your learning experience, this package also gives you access to the Learning Lounge, designed for those who wish to delve deeper into a subject and understand its nuts and bolts.

Table of Contents

1. The Alchemists
2. The Chemistry of Asset Classes: Part I
3. The Chemistry of Asset Classes: Part II
4. Assessment
5. The Learning Lounge

System Requirements

See System Requirements in the Coggno Knowledge Base

Author

Investanalitix

24 Courses

Zola Sookias, Founder & Managing Director

Mr Sookias has extensive experience in investment management, including roles in equity and fixed income analysis, portfolio management, DB and DC pension consulting, product development, manager search & selection, fund performance evaluation and monitoring, and investment publishing.

He has worked with major US investment houses, notably Black Rock Asset Management, Morgan Stanley and Bank of America, as well as a boutique firm specialising in the natural resources sector where he was the senior metals and mining analyst.

His European experience has been with Irish Life International and SEB where he was responsible for developing the investment platform serving the pan-European market, and Black Rock Asset Management Ireland, where he was Investment Director responsible for governance and oversight for the company’s Irish-domiciled active and passive funds.

Mr Sookias holds a BSc. in Geology & Chemistry and an MSc. in Mineral Exploration from the Royal School of Mines, Imperial College, University of London.