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.

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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%.

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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.

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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.

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“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.

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CI’s Financial Ratio Analysis Spreadsheet

Posted on July 28, 2014 | Computerized Investing

Excel spreadsheet automatically derives financial ratios for company analysis after a simple import of financial statement data from Morningstar.com.

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Social Media and “Pump and Dump” in the 21st Century

Posted on July 21, 2014 | Computerized Investing

While it is hard to argue with how much technology has made investing easier, there are always two sides to every coin.

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New Beginnings

Posted on July 4, 2014 | Computerized Investing

This month marks several changes here at Computerized Investing. We begin by saying goodbye to Joe Lan, who has been accepted to the University of Michigan’s Ross School of Business, where he will start his pursuit of an MBA degree this fall. For nearly the last four years, Joe has been a tremendous asset to Computerized Investing and to AAII. I wish him all the best in his studies and future endeavors.

As Joe starts down a new career path, I am excited to welcome Hareesh Jayanthi to the CI team. Hareesh has a master’s degree in finance and a bachelor’s degree in economics and has experience in the mutual fund and fixed-income arenas. Besides being a contributor to Computerized Investing, Hareesh will be part of the Dividend Investing and Stock Superstars Report advisory committees and will assist in supporting Stock Investor Pro, our fundamental stock screening and research database program, and other AAII publications and products.

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Creating a Contrarian Screen: The 52-Week Low Formula

Posted on June 30, 2014 | Computerized Investing

A discussion of Luke Wiley’s approach to stock-picking and how to build a screen using his five filters.

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Computerized Investing’s Best of the Web

Posted on June 23, 2014 | Computerized Investing

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.)

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