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The following posts are related to investment theory. Scroll down to see more articles.

The case for managed futures in active strategies

Why managed futures—an often misunderstood tactical tool—can play an important role in portfolio construction, either as a stand-alone strategy or as a key strategic element. During my three decades of experience in using managed futures in active...

Mutt vs. purebred: How should you invest?

Can lessons learned from our canine friends provide a better understanding of the characteristics of effective portfolio diversification? My wife and I have always been dog people. We’ve never owned cats, although we love to play with those of friends...

Lowering risk through active high-yield strategies

Is it possible to conquer the “low risk/good returns” challenge with active strategies? High-yield bonds may offer an attractive risk-managed opportunity. When I joined the financial-services industry in 1994, I tried to determine what it was that my...

No investment crystal ball needed

Realistically estimating strategy performance through stochastic models. Money managers have a tough job. They need to raise capital, build and maintain client relationships, keep in compliance of regulations, and then actually manage investments. All...

Not all investment returns are created equal

Understanding the important differences between absolute return, total return, and relative return. The financial media has spent quite a bit of time during the current bull market reporting on the “underperformance” of actively managed funds. While the...

Fundamental line indicators for investors

Fundamental analysis is the foundation of stock investing and continues to be the number one source of data for selecting stocks by giant institutions, market professionals, managers of small funds, and retail investors. However, the quality of...

Leverage for the long run

‘False precision’ explored: There is never certainty in terms of market or strategy outcomes, only probabilities and managing risk—and whether you have the emotional fortitude to stick with a plan and process over time. Editor’s note: Michael...

A case for active tactical investing

Lessons from behavioral economics and fractal mathematics theory can help explain why tactical investment strategies can be beneficial in portfolio construction. Editor’s note: Dennis Yamasaki has an extensive educational background in quantitative...