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Dark Hacker wrote:
> I recently asked a fellow investor the following:
>
> "Is there some quantitative (not rule of thumb) formula I can use that,
> given a range of mutual funds with known properties (bonds, cash, growth,
> value, etc) will allow me to calculate the optimal balance given these
> properties and some expected behavior in the market (projected interest
> rates, overall price move, etc)???
>
> Note this is not an attempt to predict the market but rather optimize the
> return given some market expectation and level of risk. This
> seems like a fairly straightforward problem and I'd be surprised
> aif such methods weren't already in use at all the major
> mutual fund houses."
>
> Now it turns out that what I'm refering to here seems to be Modern
> Portfolio Theory as espoused by Sharpe and Markowitz. So can anyone
> recommend any good books on Modern Portfolio Theory that will help me
> balance my mix of funds and stocks?
>
> - Hacker
>
For a thorough lesson in Modern Portfolio Theory and the math behind it , visit a
college bookstore and ask for "Investments: Analysis and Management / Jack Clark
Francis.-- 5th ed., 1991 cm.-- (McGraw-Hill series in finance). If you can find it
there, write to Schaum Division, McGraw-Hill , Inc., Princeton Rd, S-1, Hightstown,
NJ, 08520.
--
best,
Mike
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