Alternatives to Excel
Posted on August 18, 2015 | Computerized Investing
Microsoft Excel is the gold standard of spreadsheet software, and some may argue it is equally expensive as gold. But if you’re not willing to pay the premium price, what are your alternatives? When making any price comparison (especially when comparing to a free option), you have to assess what the opportunity cost may be of switching to a free or lower-cost spreadsheet.
Backtesting the Revised MAGNET Stock Screens
Posted on July 29, 2015 | Computerized Investing
One of the benefits of quantitative stock screening is that it helps to remove emotion from the equation by defining minimum criteria that a stock must meet in order to pass the screen. If you only invest in stocks that pass a stock screen, you remove the chance of investing in stocks that you may have personal interest in but that do not have the “winning qualities” defined in the screen. In order to invest in a stock methodology with confidence, however, it helps to have an idea of how it has performed over varying market cycles. While past performance is not a guarantee of future performance, backtesting allows us to see how a strategy would have hypothetically performed in the past.
CI Mortgage Refinance Calculator
Posted on April 18, 2015 | Computerized Investing
Nowadays, while interest rates are low, many individuals contemplate refinancing their mortgage. But with refinancing comes costs. Some homeowners are considered “refinance junkies” and continually jump from one low interest rate to the next, but these individuals may not factor refinancing costs into the total benefit associated with a lower interest rate.
There are several different goals when refinancing a mortgage. A majority of homeowners seek to reduce their interest expense, but there are others who appreciate the ability to extend the term of the mortgage, effectively reducing their periodic payment. On the other hand, individuals may seek to lower their loan repayment period if they are in a position to afford a higher periodic payment. Another goal might be to consolidate debt. If you have an initial mortgage as well as a home equity loan, combining the two mortgages into one may level out the payments and simplify the repayment process.
Retirement Withdrawal Calculator
Posted on January 27, 2015 | Computerized Investing
Throughout the years, there has been much discussion regarding an optimal retirement withdrawal rate. A withdrawal rate is a function of how much money you withdraw from your retirement fund each year. I’m sure many of you have heard of the oh-so-popular 4% withdrawal rate standard. Some experts have suggested a lower rate given low bond yields, while others have suggested a variable rate that gives retirees more flexibility depending on market conditions. Many assert that investors are better off choosing a first-year retirement withdrawal percentage and then growing the withdrawal amount each year to keep pace with inflation. However, this can be tricky. What if you choose the wrong initial rate? If you choose a rate that is too high, you face possible shortfall risk (the risk of running out of money within your lifetime). If you choose a rate that is too low, you might not be taking full advantage of your retirement savings.
Instead of focusing on a specific withdrawal rate to use throughout retirement, you could calculate how much you can afford to withdraw annually in retirement based on the amount of money you want to have left over for your estate, how many years you estimate you will be in retirement and estimated inflation and rate of return. CI’s Retirement Withdrawal Calculator does just this.
Stocks: Realtime Quotes Charts for Android
Posted on December 27, 2014 | Computerized Investing
Stocks: Realtime Quotes Charts for Android is an app made by StockSpy Apps Inc. that assists investors in tracking stocks and markets through price quotes, charts, news and more. The app is available for several different operating systems, but this version was downloaded to an Android tablet.
After you download and launch the app, you will be brought to the home page. Here you have the choice of looking at charts or a browser. Both selections are available at the top of the app. If you choose charts, you will see a list of indexes along the right-hand side as well as a default group of stocks. To see a given chart, click the ticker symbol of the chart you would like to view. If you choose the “browser” option, you can search the Internet with the app open. This is an interesting feature not common in many stock-related apps.
Is Your Diversified Portfolio Truly Diversified?
Posted on October 2, 2014 | Computerized Investing
Mutual funds—and more recently, exchange-traded funds (ETFs)—have offered safety and diversification by allowing individual investors to buy shares in many companies in order to spread risk. It is important for investors to understand what role they play and what role the fund managers’ play in ensuring proper diversification of their portfolio. Additionally, investors need to understand when fund companies fail on proper diversification, how that results in improper diversification and what impact that could have on their portfolios. We highlight what diversification is and why it is important, then discuss why an appearance of being diversified may not mean that your portfolio is truly diversified. Finally, we identify ways that fund managers and investors can damage their portfolio diversification.
Calculating a Firm’s Cash Burn Rate
Posted on August 25, 2014 | Computerized Investing
As of this writing, we are still in the midst of a bull run that is over five years old. Recent market volatility has some wondering how much steam remains in it, but as of the close on August 8, the S&P 500 index was only 2.8% off its high since the market bottom of March 2009, and the NASDAQ Composite was only 2.6% off its high. Between the market low of March 9, 2009, and August 8, 2014, the S&P 500 index gained 193.8% while the NASDAQ Composite was up 253.6%.
The Top 8 Sites for Company, Industry & Sector and Economic News and Analysis
Posted on August 19, 2014 | Computerized Investing
Welcome to Computerized Investing’s “Best of the Web.” Here we have brought together what we consider to be the “best of the best” when it comes to online investment analysis, research and tracking. These are the sites that we editors and staff of CI use ourselves, almost on a daily basis.
The Internet has grown into an invaluable tool for investors, but for every quality website, there are dozens (if not more) that are only marginally useful. Here we provide you with the best online resources for data and analytical tools to help you make informed investment decisions. Beyond looking for sites that offer useful information, we try to find those that are easy to use and do not swamp you with ads. Whenever possible, we seek out websites that are free, though when subscriptions fees are charged, we clearly tell you. (Keep in mind that many websites offer both free and subscription-based content.)
Our primary criterion for analyzing a website is to consider whether it offers value for its visitors. There are a large number of websites with well-designed pages and lots of content, but that possess little that is unique enough to make them stand out from their peers. We pay a lot of attention to the quality of content and whether it is credible or not.
SigFig for Android and IOS
Posted on August 8, 2014 | Computerized Investing
SigFig (short for Significant Figures) is an excellent way to manage your investments without being overwhelmed with information. The app allows users to sync their investment accounts and track stocks, funds, 401(k)s and IRAs in real-time. An attractive and easy-to-use dashboard displays all of your account balances in one secure location. Simply put, SigFig allows people to serve as their own financial advisers. Users can view charts to review performance, allocation, risk and more. News and price charts for each stock holding are also provided in a clear and easy-to-read manner.
“Risk-Wise” Risk Management
Posted on July 31, 2014 | Computerized Investing
The turmoil of the stock market over the last decade has forced professional and individual investors to refocus their attention on identifying, managing and mitigating as many investment-related risk factors as possible. Michael Carpenter’s book, “The Risk-Wise Investor” (Wiley, 2009), offers a look at the evolution of risk and how investors today should plan for and protect themselves from market risk. Carpenter has spent over 35 years in the investment business as a financial advisor. He urges investors to take an honest look at risks and to face them head-on instead of waiting until it is too late.
While developing and implementing successful trading strategies is important, managing your portfolio’s risk is equally as important. However, protecting your investments from downside risk does not have to be complicated and, according to Carpenter, can be very simple once you have the knowledge and tools.
Risk management is not a new phenomenon, but has received much press over the last few years. Carpenter argues that individual investors should employ risk management tools and ideas just as businesses and professional investors do.
He also believes that everyone has the ability, knowledge and experience to manage risk naturally. Carpenter notes that successful management of risk and reward happens every day and transferring this knowledge to your investment portfolios is not hard.