Seeking Gamma

Lost in the shuffle last week was this fascinating discussion at Morningstar about a new way to judge and evaluate the relative success of one’s retirement portfolio – not through the traditional lens of alpha and beta…

From Morningstar:

The benefits from “good” financial-planning decisions are difficult to quantify. For any given portfolio, investment decisions generally can be decomposed into two primary components: beta and alpha. Beta can be defined as the systematic risk exposures of the portfolio (usually achieved through asset allocation), and alpha is the residual (skill or luck-based) component associated with the various flavors of active management, such as tactical asset allocation, security selection, and more. Alpha and beta are at the heart of traditional performance analysis; however, their impact on a successful retirement can be far less important than other financial- planning decisions.

In this article, we introduce a concept called “Gamma,” which is designed to measure the additional expected retirement income achieved by an individual investor making intelligent financial-planning decisions. Gamma is the third letter in the Greek alphabet (preceded by alpha and beta), and within financial economics, it is sometimes used as the variable denoting an investor’s degree of risk aversion. Given that Gamma is relatively unclaimed within financial literature, we seek to give it new meaning.

Keep Reading:

Alpha, Beta, and Now … Gamma (Morningstar)

Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

What's been said:

Discussions found on the web
  1. سرور مجازی commented on Feb 18

    سرور مجازی

    […]The details mentioned in the article are a few of the most effective out there […]

  2. Auditor IT commented on Feb 18

    Auditor IT

    […]Here are a number of the web sites we advise for our visitors[…]

  3. beagle commented on Feb 19

    beagle

    […]here are some hyperlinks to sites that we link to mainly because we feel they are really worth visiting[…]

  4. tan dog commented on Feb 19

    tan dog

    […]Wonderful story, reckoned we could combine a handful of unrelated information, nonetheless truly worth taking a search, whoa did 1 master about Mid East has got a lot more problerms too […]

  5. nasa robots world commented on Feb 19

    nasa robots world

    […]Every as soon as in a whilst we select blogs that we study. Listed beneath are the most up-to-date internet sites that we pick out […]

  6. free download for windows 8 commented on Feb 20

    free download for windows 8

    […]that may be the end of this write-up. Right here you’ll find some websites that we feel you will enjoy, just click the hyperlinks over[…]

  7. free download for windows 7 commented on Feb 20

    free download for windows 7

    […]we came across a cool website which you might appreciate. Take a search if you want[…]

  8. pdr training posted on Feb 21

    pdr training

    […]here are some hyperlinks to web sites that we link to due to the fact we believe they may be really worth visiting[…]