Tag archives: Model

Forecasting Long Term Stock Returns With The Gordon Growth Model

Last update on June 27, 2016.

Image Credit: Lightspring / Shutterstock.com

 

Wouldn’t it be nice to know how much stocks will return over the long term? Such information would be very useful, as it would allow us to better plan for the future. If you save for your retirement based on the assumption that stocks will return 9% per year, but they return only 5% per year, you could be in trouble.

Predicting stock market returns might sound difficult, and indeed, those who study stock market data find that market returns fluctuate randomly in short time spans, even up to a few ...

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How To Create Your Own Optimized Portfolios

Last update on May 23, 2016.

Image credit: robuart / Shutterstock.com

 

A couple of months ago, I surveyed MoneyGeek’s members to understand which new features they most wanted to see. Of all the options I made available, the members most often requested the ability to create their own optimized portfolios.

For those who are unfamiliar with the concept, portfolio optimization is a process which takes a number of investments and outputs a portfolio allocation that minimizes the portfolio’s risk without sacrificing potential returns. For example, if we specify that we want a portfolio that consists of Stocks A, B and C, portfolio ...

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