Inour study we have highlighted a solid black line that represents the “true” efficient frontier. It is estimated with the “true” means and variance–covariance matrix of asset returns, thus neglecting skewness and kurtosis of the underlying return distributions. However, for the assessment of the effect of errors in parameter estimation on realized risk/return profiles this [...]
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Creating a Spending Plan
Because your compromise budget is (in theory, at least) a budget that will work for you and move you toward your goals, we’ve got to make sure it gets put into action. The spending plan you are now going to construct is going to be based on the amounts you’ve used in your compromise budget. [...]
Built-in resentment or regret
Investing has social costs as well as financial costs. Every period has its popular investments and its forgotten asset classes. Fashion changes, fads fade, and no one can keep up with all the latest hot new things. Inevitably, there will be regrets and resentments. Even if you are in the right investment class, you might [...]
Spending Plans
If you can move from having just a budget to having a spending plan, your success at getting rid of debt is almost guaranteed. A spending plan will ultimately help you enforce what I’ve said from the start is the true secret of getting out of debt: spend less and pay more toward your debts. [...]