Top Five Articles from November: Modern Portfolio Theory and P2P Lending
Although a fundamentally important financial concept, modern portfolio theory (MPT) has been of little practical value to retail investors in their asset allocation. Hansi Mehrotra, CFA, believes it’s time to develop a more practical risk-management measure.
Michael Pond, CFA, delivered an interesting discussion of inflation-linked debt at the 2016 CFA Institute Fixed-Income Management Conference. So what are inflation-linked bonds? As Jason Voss, CFA, explains, they are most typically debts issued by sovereign nations whose nominal interest rate is adjusted, either up or down, by an inflation measure.
Preferred stock index funds are a double-edged sword, says David Allison, CFA, CIPM. They are a simple, liquid, and low-cost way for investors to gain exposure to preferreds, but their simplicity makes them a blunt tool and harbors risks.
In January, 70% of CFA Institute Financial NewsBrief readers didn’t expect a US recession in 2016. So what about 2017? Ron Rimkus, CFA, analyzes the differing results of this same poll question 11 months later.
Peer-to-peer (P2P) lending is a form of direct lending between lenders and borrowers. In a P2P transaction, money can flow from the lenders directly to borrowers through the P2P platform, bypassing traditional banking channels. As such, it is generally considered a disruptive form of fintech. Lu.com is one of the world’s largest players in the P2P market. Larry Cao, CFA, sat down with Gregory Gibb, CEO and chairman of Lu.com, to discuss how the industry will evolve.
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