Improve Your Allocation by Gauging Risk and Ranking Asset Returns
Description
For this week’s Individual Investor Show, Charles Rotblut and Jenna Brashear take a look at AAII’s asset class heat map, which ranks the annual returns for each of the asset class groups used in the AAII Asset Allocation Models over the past 10 years. They discuss how this heat map demonstrates the benefits of diversification and how analyzing these results can help you become a more diversified individual investor.
In the second part of the broadcast, we sit down with Matt Bajkowski to discuss his article, “Understanding Risk-Adjusted Returns via the Sharpe Ratio,” which focuses on the key relationship between risk and return and how vital it is to be compensated for taking on extra risk. Bajkowski delves specifically into how the Sharpe ratio can help you assess whether the risk of a security is justified by its return.
Watch this episode and learn:
How to effectively use the Sharpe ratio to become risk averse
Why investors should expect compensation for a riskier investment
How to read the AAII asset class heat map and apply it to your 2022 allocation strategy
Asset Class Segment
Asset Class Group Performance: Large Caps Lead in 2021 by Charles Rotblut, CFA
Risk-Adjusted Returns Segment
Online Exclusive: Understanding Risk-Adjusted Returns via the Sharpe Ratio by Matthew Bajkowski
Other Links
AAII Journal: February 2022 Issue
Register for Upcoming AAII Webinars
Want more financial education? Learn more about AAII at https://www.aaii.com
ABOUT AAII
The American Association of Individual Investors is an independent, nonprofit corporation formed for the purpose of assisting individuals in becoming effective managers of their own assets through programs of education, information and research.
Individual Investor Show: Improve Your Allocation by Gauging Risk and Ranking Asset Returns | AAII
United States
