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)

What's been said:

Discussions found on the web
  1. خرید vpn پر سرعت commented on Sep 20

    vpn ایفون

    Do you have a spam difficulty on this blog I also am a blogger, and I was wanting to know your circumstance we have created some wonderful processes and we are looking to swap approaches with other individuals, be positive to shoot me an e mail if intr…

  2. خرید وی پی ان commented on Sep 21

    vpn ایفون

    Excellent blog! Is your theme personalized created or did you obtain it from someplace? A layout like yours with a number of straightforward adjustements would actually make my website stand out. Remember to permit me know exactly where you received yo…

  3. اکانت وی پی ان commented on Sep 21

    vpn ایفون

    I was curious if you ever imagined of shifting the format of your internet site? Its very nicely written I adore what youve acquired to say. But probably you could a minor much more in the way of articles so individuals could hook up with it far better…

  4. خرید vpn makers commented on Sep 22

    vpn ایفون

    Hey! I know this is somewhat off subject matter but I was pondering if you understood exactly where I could get a captcha plugin for my remark form? I’m making use of the very same blog system as yours and I’m getting difficulties locating 1? Many than…

  5. اکانت وی پی ان commented on Sep 23

    vpn ایفون

    A single was produced only for exhibiting seconds and modest even though a diverse a single employing moment graduations is produced for implying hours.

  6. w88 commented on Sep 20

    … [Trackback]

    […] Here you can find 71452 more Info on that Topic: […]

  7. w88 commented on Sep 20

    … [Trackback]

    […] Info to that Topic: […]

  8. Harold Jahn Prosperity commented on Nov 14

    … [Trackback]

    […] There you will find 93829 more Information to that Topic: […]