Leaving Investment Style Boxes Behind

Recently I was interviewed by a financial magazine on the topic of Exchange Traded Funds (ETFs). I pointed out that ETFs are an excellent investment tool to implement a sector rotation strategy, and that sector rotation was completely different from the traditional Morningstar Style-Box approach to equity selection. Morningstar is perhaps the best-known research firm specializing in independent mutual fund analysis and its star-rating system is widely used in the investment industry. In 1992 Morningstar introduced a system for categorizing mutual funds by investment style. The Morningstar Style Box divides the equity mutual fund universe by two major characteristics: market capitalization (or the market value of the companies in a fund) and the valuation of the stocks in a fund based on the P/E and P/B ratios. So a mutual fund that owns large cap stocks with high P/E and P/B ratios is likely to be found in the large growth, or upper right hand quadrant of the box.

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Simple Ways For Investing In Mutual Funds

Mutual funds are something that almost everyone has at least heard about as a way to increase your cash. And this is why it is one of the very popular instruments used for investing. But there are some important steps you need to go through, before you can start investing in mutual funds. These steps are simple enough – sort out both your finance and your goals. This will help you to understand how much money you have now and how much you want to have in a given period of time. It’s always better to differentiate your goals as being short-term or long-term. But once this is done, you’re probably stumped about what to do. How do you proceed to actually investing your money? There are different ways you can use. The first, and usually the most convenient, way of investing is through an agent.

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Investing Abroad: Understanding Emerging Markets

For those interested in getting involved in investing, the stock market is a logical place to start. However, the earning potential of domestic companies isn’t quite what it used to be.

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