ECON 223 Lecture Notes - Lecture 1: Charlie Eppes, Alan Eppes, Portfolio Investment
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*we must compare our portfolio with baseline (i. e. dow jones). The due date of the opening letter (or the first weekly letter) is jan 24th, 2014. He has a good understanding of portfolio investment strategies, and he wants to take some risk and test his fortune with this investment. ) (possible scenario 2: alan eppes retired city planner and also a father of charlie eppes. After retiring, he sold his house to his son for m, and he wants to invest that m. He wants to earn some stable returns from his investment. ) Understanding investors" characteristics and their needs are important since we need to find an optimal portfolio strategy for our investor. In the opening letter, we should carefully give a good story of our imaginary investor and form a well-designed portfolio investment strategy. Low risk asset -> less volatile return series (or small variance) High risk asset -> more volatile return series (or high variance)
