@Value Hiker, that is an interesting stat. Math might not be the end all be all of investment, there might some art to it, but at the end of the day I would still rather have a solid math background. It must just be the engineer in me.
Two things. One, they feel providing the results of the reseach can help people make money-they are basically saying here is how it works, but leaving you to do the specific research on what stocks fit the profile. You can do the calculations on any stock that interests you, if you are math inclined.
Second, the organization does have a for-profit arm. I don't know whether it offers any investment patterned after this model portfolio. But here is the background on it,
American Investment Services, Inc. (AIS) is an S.E.C. Registered Investment Adviser founded in 1978. AIS is wholly-owned by the non-profit scientific and educational organization the American Institute for Economic Research (AIER). Our investment approach is consistent with AIER's scientific research findings, as described in their popular book How to Invest Wisely. We are governed by a Board of Directors appointed by AIER.
We provide low-cost independent Asset Management Services to individuals (including IRAs), estates, trusts, retirement plans and charitable organizations. We publish the Investment Guide, a monthly newsletter. We are also the developers of a rigorously researched, disciplined approach to large-cap value stock selection which we call the "High Yield Dow" strategy and one of a select group of advisors specifically qualified to provide clients with access to fund products from Dimensional Fund Advisors (DFA).
Re: The Perfect Portfolio
Value Hiker
6/4/2012 1:02:44 PM
@icebreaker1975, I can give you a hint on what will happen. Check James O'Shaughnessy and his book <<What Works on Wall Street>>.
Mr. O'Shaughnessy spent tons of efforts to analyze the past history of the stock market and found several rules that will boost investors' return. He was so convinced that he started a fund based on his book. The result was so horrible that later on his book is renamed by some reviewers as <<What used to work on Wall Street>>
I liked it until the part where I was told that this is a non-profit research outfit that doesn't tell you what they pick.
Okay, but then, what's the point?
They should convert to for-profit and allow people to make money on their research if it's that good.
Re: 2009
"In that year-long bull market following the economic meltdown, the market's return was 54.4 percent, while the portfolio's total return was 2 percentage points lower."
"And although the total return of the AIER-Beta in 2009 was 52 percent compared to the market's 54.4 percent, the portfolio's two-year average beat that of the market considerably. It showed a net increase of 34 percent over that period, compared to the market's 6.9 percent increase."
Ok, AIER(sic), it looks good, it sounds good, and you ahe have proven to us that it works. 10 out of 11 years isn't bad and is something I can definitely ascribe to either great math, a good market, or maybe even pure luck...but even a cynicist like myself would love to "win" 10 out of 11 years. But, just out of curiosity, what happened in that "11th year" that threw that streak off?
Re: The holy grail
driven
6/4/2012 12:17:30 PM
There is hope for me and my only fair grasp of math yet!
@Telecom, with all due respect, according to some research, in general, investors with math or engineering background usually have lower return than investors with art or history major. Investor is half science at most. That is why Warren Buffett said: Don't do equation with Greek letters in it.
Does these wall street quants (quantitative analyst) play a major role in the subprime crisis ?
Anyone do the calculations? What stocks do you think are in the portfolio right now?
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