Defined Portfolio

  

In addition to ETFs and Mutual Funds, the third type of pooled asset, publicly traded entity that investors may consider is the defined portfolio, or investment trust. It's usually a mix of stocks, bonds, and related assets that are fixed and not slated for individual trade, to be retained in the portfolio for the duration of the platform. These are often in specific sectors, such as energy, oil and fuel transport, or real estate. A REIT (Real Estate Investment Trust) and a Unit Investment Trust are two examples of defined portfolios.

Contrary to some rumors, there are no cryptocurrency defined portfolio trusts on the horizon.

Related or Semi-related Video

Finance: What is Modern Portfolio Theory...4 Views

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Finance allah shmoop what is modern portfolio theory All right

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basic idea Here people Diversification is good Dig it right

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C d i g there that's modern Alright let's goto

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a gn modern like when hunk and invested from their

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cave Well they just invested in good rocks or spears

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and really didn't worry about much else And well math

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hadn't really been invented yet So like who knew that

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If all right well then along came harry markowitz in

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nineteen fifty two who tried to science and math the

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crap out of the stock market What he came up

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with was modern portfolio theory which basically said that there

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was a smarter way to invest than just you know

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putting your life savings into blockbuster because you like the

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logo using all sorts of advanced metrics that we won't

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torture you with here The theory he devised was that

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well rather than throwing your money against the wall to

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see what sticks you could use extensive elaborate data to

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determine the best way to maximize your returns depending on

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how much risk you were willing Teo you know risk

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And there are five key ideas behind modern portfolio theory

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And yes of course we have videos on each of

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these The first is alfa which is kind of like

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how smart you are in the market Then there's beta

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which is about volatility in a broadway The vics we

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got a whole video set on that Then they're standard

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deviation and no that's not some kinky reference to fifty

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shades It's more about how the market diverges from your

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given individual stock pick and volatile things are finally the

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beta then there's our squared it's all about how a

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stock or a given index conforms to a given line

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or expected return ratio Like how close it is how

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proximate is And then finally you have the sharpe ratio

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Thank you bill sharp from stanford university who also talked

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about being smart in the market so that you could

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evaluate your rich turns whether they were smart or just

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a lottery ticket Lucky Oh and we're probably not such

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a wise investment in the beginning even though they turned

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out okay That would be sort of the sharpe ratio

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Yeah all right Well in general mpt skews toward less

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risky investments but it all comes down to risk reward

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Tolerance in the end if for whatever reason you feel

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supremely confident that radio shack is about to make a

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massive come back well you might be able to justify

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taking more risk in loading the dice But to be

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clear radio shack was just a bad example So kids 00:02:33.29 --> [endTime] don't try this at home

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Finance: What does it mean to rebalance a portfolio?
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