本站提供专业的[留学生论文]定制业务，如需服务请，联系电话：13671516250.
目前，几乎所有的家庭都会有退休或用于教育支付的一个延税长期投资帐户。然而，许多人可能会发现自己的投资收益不如他们所期望的。这个时候人们会恐慌，如果没有足够的资金时，他们需要钱来做这些投资。
Introduction
Nowadays almost all families have at least one tax deferred long term investment account(s) for retirement or education. However, many people may find out their investments turn out to be not as good as what they expect. People would be panic if there are no enough funds when they need money from these investments. A good management of these long term investments is vital. Portfolio rebalancing is not only important for individual investors; it’s much crucial for many institutional investors such as mutual fund and insurance companies. Picking the right investment vehicles is not the end of the story. On-going monitors and adjustments have to be made due to the power of compounding. Therefore, portfolio rebalancing plays a big role for long-term investments. It is like a health advice for your investment, equivalent of “exercise regularly” and “do physical exam every year”; it may not harm your portfolio instantly; but if you ignore it, a serious damage on your portfolio could be made in the long run. This paper will explain why portfolio rebalancing is important, propose a rebalancing strategy utilizing technical analysis, and compare the proposed methods with other traditional rebalancing strategies.
Portfolio management (PM) is the art of selecting the right investment policy for the investor in terms of maximum return at a given level of risk. Investment policy which is prepared by portfolio manager provides the general investment goals and objectives of the investor and the investment strategies that the manager would apply to meet investor’s expectation. That includes specific information such as asset allocation, risk tolerance level, expected performance, and other requirements. PM contains three stages: asset allocation, security selection, and rebalancing strategy. Asset allocation of a portfolio, which is a key factor in investment performance, mainly determines a portfolio’s risk-and-return characteristics. Studies has suggested that up to 80% or more of the variability in the portfolio performance is explained by asset allocation, with the rest determined by security selection, market timing, and other factors. By analyzing the expected returns and risks of different securities within various asset classes, portfolio managers can seek to construct portfolios that will yield the highest possible return for a given level of risk.
However, we should have in-depth understanding about asset allocation. It is a dynamic process. Because the prices of different securities change over time, change in original target allocations might lead to increase risk or lower returns and hence make impossible for investors to achieve initial investment aim. Portfolio manager would monitor their portfolios frequently and have procedures in place to restore their original target allocations, so that the portfolio performance is in line with the investment policy which addressed investors’ objectives and risk tolerance level. This dynamic process is called portfolio rebalancing.
The importance of rebalancing
Portfolio rebalance is critical because it can make investors to maintain their target asset allocation. If the portfolio is rebalanced periodically, the target allocation can be maintained. As a result, the exposure to risk relative to target asset allocation is reduced. As a result, we should rebalance the portfolio in order to recover the portfolio to its original target allocation. Therefore, the primary goal of a rebalancing strategy is to minimize risk of the portfolio relative to a target asset allocation, rather than to maximize returns of the portfolio. The importance of portfolio rebalancing can be explained from following three aspects: 1. Investors need effective and efficient disciplines to manage their investment portfolio rationally from behavioral finance perspective; 2. Risk management and diversification is the foundation for asset management; 3. Because portfolio rebalancing is inherently contrarian process, it adds value to the portfolio.
Literature Review
Objective of Research
Structure
Rebalancing Approaches and Strategies
Data and Experiments
Empirical and Experimental Results
如需定做,英语论文请联系我们专家定制团队，QQ337068431，热线咨询电话：021-62170626
相关文章：
