Individual Financial Research Project

Creating a Portfolio through Financial Research
Investments
Introduction
In the U.S. alone, there are approximately 8,000 mutual funds, 8,000 hedge funds, 4,000
funds of funds, plus numerous other types of investment accounts. Regarding mutual funds,
there are approximately 8,500 publicly traded companies in the U.S., many of which are not
widely traded due to company size or their presence in the OTC market. To develop my own
actively managed “fund”, there are numerous facets of investing and portfolio management that
must be researched. This paper will review the development and management of an investment
fund, covering investment research, portfolio construction, portfolio management, trading
strategies and portfolio performance after the three-week period.
Investment Research
To determine what I would want in my portfolio, I needed to conduct research into the
different asset classes that comprise investment portfolios, such as equities, fixed income, real
estate, commodities, etc., as well as industry and sector investment classes.
Asset Classes
Before you develop an investment portfolio, you have to determine what kind of assets
that you want in it. The average American is familiar with the “stock” market through the wide
adoption of 401k retirement plan accounts and self-managed individual retirement accounts. The
primary asset classes that investors deal in are equities, fixed income, real estate, commodities,
etc.
Equities. Equities is another name for stock, which is more commonly used by the non-
investing public. Equity represents ownership of some portion of an asset. It is tied directly to
the assets of a company or venture. While the average return on equities is higher than that of
bonds, they are much more volatile, which explains why there are nearly as many equity mutual
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funds as there are quality publicly traded companies. People and companies that invest in equity
are usually looking to capital appreciation for profit and dividends for income.
Fixed Income. Investments in fixed income instruments are not designed to provide capital
appreciation (although opportunities occur). Bonds, certificates of deposit, money market funds
and investment trusts are the more common forms of fixed income investments. Bondholders
receive a fixed income payment based on the amount of money invested with a company and the
interest rate of the debt instrument, plus it has a higher claim on the assets of a company in the
event of liquidation or reorganization than shareholders have. The more common types of bonds
are U.S. Treasuries, municipal tax exempt, municipal revenue, mortgage-backed securities and
corporate. The higher the risk, the higher the return, in general.
Real Estate. When the stock markets are especially volatile or uncertain, many investors retreat
to U.S. Treasuries to preserve principal and for those who seek higher returns, they turn to real
estate, which is what occurred after the technology stock bubble burst in 2001. Real estate is
often held in partnerships. Other forms are in equity companies that specialize in real estate and
real estate investment trusts which produce income for investors.
Commodities. There are so many items that qualify as commodities. Some of the more common
commodities that are invested in are oil, natural gas, gold, silver, wheat and corn. The
investments are made directly and through derivative contracts called futures. This type of
investment is for the savvier investor and also includes a lot of volatility.
Assets can also be classified by the company characteristics, such as market
capitalization, lifecycle stage, valuation perception, income producing, etc.
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Investment Sectors
Investments can also be classified by the types of businesses conducted by various companies.
The common sector groups are utilities (communications, water, electrical natural gas), energy
(oil and natural gas services), financials (banks, insurance, investments, real estate), industrial
cyclicals (aerospace, building, equipment/machinery, chemicals, paper and packaging),
consumer durables (auto, housewares, conglomerates, rubber, shoes) , consumer staples (food,
cosmetics, grooming, tobacco), services (transportation, hotels, restaurant, business and personal
services), retail (apparel, department stores, food stores, miscellaneous shops), health
(pharmaceuticals, medical, drug companies), and technology (technology components,
information technology, electrical equipment, specialized machinery, precision instruments).
The sectors can then also be broken into industries. It would seem that most investment
managers that are involved in industry or sector funds have some specific industry expertise that
sends them in that direction.
Portfolio Construction
Before you can put a portfolio together, you have to set investment goals, risk tolerance,
and portfolio type. Next, you have to select your stocks and determine what indices are
comparable to your portfolio.
Determining Investment Goals – Time, Risk Tolerance, etc.
Currently, I am a single mother with a daughter who works for the federal government.
Realistically, I would need an investment portfolio to produce above average returns – 8% -
10%. To have the chance of producing that range of returns with diversification, I need to have a
higher tolerance for risk. Therefore, I would expect to invest in some stocks that have betas of
1.25 and above and closer to 1, if they pay dividends.
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Selecting a Portfolio Type
In my research, I decided that the best way for me to push for my return is to take an income-
equity approach. Overall, stocks that pay dividends produce higher returns in the long run. This
would also involve be a slightly speculative approach to managing the portfolio based on
behavioral finance, which will be discussed in more detail later in the paper. I basically plan on
having an initial portfolio that consists of roughly half high income producing stocks and growth
stocks. My portfolio will be created with $25,000 in capital and will use margin purchasing,
when I think it is advantageous.
Stock Screens and Initial Stock Selections
To select stocks for my portfolio, I reviewed MSN’s and Yahoo!Finance’s stock screens. I
decided to use MSN because it more user friendly than the Yahoo!Finance version, which needs
to open a separate Java-run window with nothing in it that you can’t close. I also didn’t find it
much more useful, although it looks better aesthetically. The screens run for income and growth
stocks are presented below (the screen results are provided in Appendix A).
Screen Field Yield Screen Growth Screen

Market Capitalization ≥ $1 billion ≥ $0.5 billion
Beta - ≥ 1.0
Yield ≥ 7% -
Share Price - ≥ $10
Expected 5-Year EPS Annual
- ≥ 10%
Growth
Avg. Analyst Recommendation - Buy
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The initial stocks selected are presented in the table below. The one exception to the stock
screens was the initial purchase of Avon stock because I am an Avon Sales Representative. The
stock was sold within a couple of days. The income stocks/funds were initially selected based on
their dividend yield. However, I reviewed each stock/fund in depth more to make sure that I was
comfortable with the selection. Therefore, the initial income selections do not represent the five
highest yields. The same approach was taken for growth stocks.
Income Growth Other

Chimera Investment Corporation China Life Insurance Company Avon Products, Inc.
(CIM) (LFC) (AVP)
Frontline Ltd. Ordinary Shares
Morningstar, Inc. (MORN)
(FRO)
Magyar Telekom Stepan Company Common
Telecommunication (MTA) Stock (SCL)
Systemax Inc. Common Stock
Pimco High Income Fund (PHK)
(SYX)
Provident Energy Trust Ordinary W.R. Grace & Company
(PVX) Common Stock (GRA)
Comparative Portfolio Benchmarks
To determine how well a portfolio performs, it needs to be compared against a similar
basket of assets. The RiskGrades reports in Appendix D compare my portfolio to the S&P 500
as a benchmark. While that may be an appropriate benchmark for overall performance against
one of the market indices (the Dow Jones Industrial Average and NASDAQ also being popular),
it is not an apples to apples comparison. To do that, I had to identify the kind of portfolio that I
had assembled. I first identified other equity-income funds and found that my portfolio was
closest to a Large Cap Value fund. Therefore, I compared my portfolio against two large cap
value asset class benchmarks – Russell 1000 Value Index and the MSCI Large Cap Value Index,
as well as the S&P 500.
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Portfolio Management
Typically, managers of actively managed funds make up to three primary management
decisions for investing – market timing, security selection and asset allocation. Market timing is
difficult (practitioners of technical analysis may disagree) because you are attempting to predict
the future price AND movement of stocks. For security selection, the overall record of active
managers is spotty and mixed, at best. There are some managers who consistently do above
average, such as Peter Lynch from Fidelity. However, the careful screening of mutual funds will
show that most perform subpar over long periods of time due to the risk-return relationship in
their investments. For my portfolio, the holdings will change based on the condition of the
companies in the portfolio and on short-term opportunities due to behavioral finance driven
investment opportunities.
Trading Strategies – Behavioral Finance
Behavioral finance is the growing theory that’s taking the considerable evidence that
casts a challenge against the concept of market efficiency. While the efficient market theory
looks for a rational mathematical model to explain fluctuations in asset prices behavioral finance
looks t psychology to explain asset valuation and why prices rise and fall (Ritter, Jay, 2003, p.
429).
Cognitive psychology is how people think, which supports that investors’ emotions and
biases affect stock prices and markets (Jones, Charles, 2010, p. 318). People make systematic
errors in the way that they think; some are overconfident, at times they put too much weight on
recent events happening (Jones, Charles, 2010, p.318). Per, Charles Jones, “Investors are
motivated by numerous “irrational” forces; other investors, recognizing these mistakes in
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judgment, may be able to make a profit” (2010, p.318). There are a number of biases that can
possibly affect an investor’s decision: loss aversion, overconfidence, framing, and herding effect.
The loss aversion “refers to the tendency that investors strongly prefer avoiding losses as
opposed to achieving an equivalent amount of gains” (Jones, Charles, 2010, p.319). Per Jones,
almost 50 percent investors are most likely to sell stocks when they should keep them rather than
getting rid of the useless stocks. Overconfidence is one of the biases that can affect an investors
ability that drives investors to make decisions that can detrimental to their investments.
Investors could potentially invest too little into diversification, because of tendency to invest too
much in one thing that is familiar to them or a stock that is receiving a lot of attention from other
investors. Investors tend to invest in local companies even though it may not be the best decision
for their particular portfolio.
The framing is the notion that how a concept is presented to individuals matters. For
example, some movie goers may prefer to save money to see a matinee movie that is earlier in
the day rather than going later in the evening that will cost them additional money to see that
exact movie. They will get more business if people are feeling that they are getting a discount at
off-peak times rather than paying additional money at peak periods. The herding effect, is
explained in our text as, “when money managers in proximity to each other, invest similarly,
which creates a self-reinforcing herding effect” (Jones, Charles, 2010, p. 319).
The brief introduction to behavioral finance has only touched on a few points. It is very
difficult to find trading strategies that reliably make money. This does not imply that financial
markets are efficient. Behavioral finance is not a separate discipline, but instead will
increasingly be part of mainstream finance for some.
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Selecting New Stocks
My use of behavioral finance concepts seeks superior return investment opportunities that
will rely upon publicly available news data. Examples of behavioral finance investment
opportunities include events such as the conviction of Martha Stewart on insider trading of IM
Clone or the conviction of the CEO of Tyco for tax evasion. Knee-jerk market reactions to news
create temporary opportunities for short-term superior gains.
BP is one of the stocks that were purchased under this approach. The stock had dropped
to $29 per share to rebound to $39 per share, plus the eventual reinstatement of dividends will
ultimately yield approximately 9% for investors who bought the stock during at its price before
the oil well explosion. Another stock bought under that approach was Hewlett-Packard. The
CEO had to resign due to falsifying expense reports to hide his relationship with a marketing
consultant. Other purchases included Exxon-Mobil, an ING investment fund, Apple, Ford, and a
Cohen and Steer’s investment fund.
Portfolio Performance
Reflecting its S&P Beta, the portfolio I created fared worse than the broader indices, but
not much worse. I believe the results would have been more favorable if the period were
significantly longer to reflect the benefit of dividends.
Total Daily Return
Calculating total returns is one way to figure out exactly how much money you’ve made
or lost on your investment. To calculate this figure, you have to determine how much money
you originally invested and then factor in other components such as, interest, dividends, and
appreciation or depreciation.
The average total daily return for the portfolio was -0.926%.
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Risk and Return
The riskiness of the portfolio was tracked each day, as well as its beta vis-à-vis the S&P
500 and its diversification benefit. As the portfolio was managed, the decisions made reduced
the risk and increased the diversity benefits. However, there were a couple of stock purchases
that caused the risk (by RiskGrades Score) to rise towards the end of the portfolio period. This
problem was alleviated by the end of the period, but the charts below will display how the
portfolio changed over time.
RiskGrade Score Over Time
145
140
135
Score
130
125
120
115
110
0
0
10
10
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10
01
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/2
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8/
27
29
31
10
12
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8/
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7/
7/
8/
8/
Date
Diversification Benefit Over Time
60
50
Score
40
30
0
0
10
10
10
10
01
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Date
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S&P Beta Over Time
1.35
1.30
1.25
Score
1.20
1.15
1.10
1.05
0
0
10
10
10
10
01
01
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Date
The portfolio had a mean daily return of -0.962%, a variance of 0.059% and a standard
deviation of 2.426%. This is significantly greater than the benchmarks or the S&P 500. The
detailed calculations are contained in Appendix C.
Benchmark Comparisons
My portfolio was described as an income-equity type of portfolio, comparable to Large
Cap Value funds. The chart below shows how my portfolio compared to the two asset class
benchmarks and the S&P 500.
Cumulative Wealth Index Benchmark

1.05
Cumulative Wealth Index
1.00
Net Portfolio Value
0.95
Russell 1000 Value
0.90 Index
MSCI Large Cap
0.85 Value Index
S&P 500
0.80
7/ 010
7/ 010
8/ 10
8/ 010
0
8/ 10
8/ 10
8/ 10
8/ 010
01
0
20
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20
/2
/2
/2
/2
/2
2
2/
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27
29
31
10
12
7/
Date
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Conclusion
Although the portfolio did not do well over the three-week period, it is designed to
generate income while hunting for growth opportunities. If the resulting portfolio on the last day
of tracking (August 13, 2010) had been the portfolio from the beginning, then the portfolio
would have been very similar to the benchmarks and the S&P 500. Understanding behavioral
finance concepts can allow investors to periodically seek superior returns without significantly
increasing the risk of their portfolios because emotional and biased framework responses to
market news are not necessarily indicative of fundamental issues with a company.
This is exemplified in the rebound of the BP stock after it stopped the oil well leak.
During the leak, no one used less oil and there were few, if any protests/boycotts of BP gas
stations. Its financial picture is sound, even with the $20 billion it will ultimately contribute to a
clean-up fund.
This research also highlighted to me how complex portfolio calculations become once
you go beyond the two-stock model. Most importantly, it has also led me to believe that there
are some investment managers who can “beat” the market, but that they are few and far between
because it is a difficult thing to do.
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Appendix A
Appendix A shows the results of the stock screens used to identify portfolio stocks.
Income Stock Screen

Symbol Company Market Cap Div/Yld Beta
PVD Administradora de Fondos de Pen 1.08B 11.60% 1.20
AWF Alliancebernstein Global High I 1.21B 8.50% 0.93
NLY Annaly Capital Management Inc C 10.01B 15.40% 0.38
AZN Astrazeneca PLC Common Stock 70.45B 7.00% 0.66
AV Aviva plc Unsponsored ADR (UK) 14.99B 8.00% 1.22
BFR BBVA Banco Frances S.A. Common 1.37B 8.70% 1.45
BPT BP Prudhoe Bay Royalty Trust Co 2.02B 9.00% 0.67
CSQ Calamos Strategic Total Return 1.27B 7.70% 1.29
CEL Cellcom Israel, Ltd. Ordinary S 2.65B 11.70% 0.60
CTL CenturyLink, Inc. Common Stock 10.68B 8.20% 0.72
CQP Cheniere Energy Partners, LP Ch 3.03B 9.10% 0.35
CIM Chimera Investment Corporation 2.96B 18.00% 1.39
CPNO Copano Energy, L.L.C. 1.86B 8.20% 0.84
EVV Eaton Vance Limited Duration In 1.87B 8.70% 0.70
ETP Energy Transfer Partners, L.P. 9.74B 7.00% 0.50
ERF Enerplus Resources Fund Common 4.06B 9.00% 1.17
FGP Ferrellgas Partners, L.P. Commo 1.67B 8.30% 0.71
FTR Frontier Communications Corpora 2.33B 13.60% 0.76
FRO Frontline Ltd. Ordinary Shares 2.58B 9.10% 1.27
HTS Hatteras Financial Corp Hattera 1.09B 14.90% 0.28
IGD ING Global Equity Dividend and 1.04B 11.20% 0.96
LGCY Legacy Reserves LP 1.02B 8.30% 1.04
LINE Linn Energy, LLC 4.43B 8.50% 0.58
MFA MFA Financial, Inc. 2.12B 10.20% 0.42
MTA Magyar Telekom Telecommunicatio 3.11B 10.70% 1.29
MWE MarkWest Energy Partners, LP Co 2.59B 7.10% 1.10
NGG National Grid Transco, PLC Nati 19.47B 9.30% 0.70
NRP Natural Resources Partners LP 1.86B 8.60% 0.66
NAT Nordic American Tanker Shipping 1.35B 8.50% 0.85
NS Nustar Energy L.P. Common Unit 3.68B 7.10% 0.26
PTNR Partner Communications Company 2.56B 10.30% 0.63
PGH Pengrowth Energy Trust Units 2.85B 8.30% 1.42
PVR Penn Virginia Resource Partners 1.24B 7.90% 0.71
PWE Penn West Energy Trust Ordinary 8.42B 8.50% 1.34
PTY Pimco Corporate Opportunity Fun 1.15B 8.00% 1.04
PHK Pimco High Income Fund Pimco Hi 1.50B 11.80% 1.41
PVX Provident Energy Trust Ordinary 1.80B 10.20% 1.47
NGLS Targa Resources Partners LP Com 1.84B 7.70% 1.32
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Growth Stock Screen
Symbol Company Retail Price Market Cap Beta 5 yr Growth
LFC China Life Insurance Company Li 66.83 126.41B 1.37 213.46%
HDB HDFC Bank Limited Common Stock 152.71 23.30B 1.88 20.22%
HLF Herbalife Ltd. Common Stock 50.10 3.00B 1.95 22.05%
KB KB Financial Group Inc 43.31 14.86B 2.29 18.63%
MORN Morningstar, Inc. 45.54 2.24B 1.30 23.76%
UEPS Net 1 UEPS Technologies, Inc. 14.19 643.92M 1.38 14.37%
SHG Shinhan Financial Group Co Ltd 82.58 19.58B 2.03 11.92%
SCL Stepan Company Common Stock 71.55 716.09M 1.44 28.59%
SYX Systemax Inc. Common Stock 16.47 603.91M 1.66 25.30%
GRA W.R. Grace & Company Common Stock 25.38 1.84B 2.69 35.11%
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Appendix B
Appendix B shows the trade transactions during the three week portfolio period.
Action
Execution Date Description Quantity Description Price Commission Reg Fees Total Cost
8/12/2010 14:53 Buy 300 IGD - ING GLOBAL EQUITY DIVIDEND AND $10.70 $9.95 $0.00 ($3,219.95)
PREMIUM OPPORTUNITY FUND
8/12/2010 14:44 Sell 100 FRO - FRONTLINE LTD $29.44 $9.95 $0.05 $2,934.00
8/12/2010 14:43 Sell 147 SYX - SYSTEMAX INC $13.17 $9.95 $0.04 $1,926.00
8/11/2010 12:26 Buy 300 F - FORD MOTOR COMPANY $12.50 $9.95 $0.00 ($3,759.95)
8/11/2010 12:26 Sell 30 LFC - CHINA LIFE INSURANCE COMPANY $64.93 $9.95 $0.04 $1,937.91
LIMITED
8/10/2010 10:11 Buy 100 HPQ - HEWLETT PACKARD CO $42.74 $9.95 $0.00 ($4,283.95)
8/10/2010 10:10 Sell 495 CIM - CHIMERA INVESTMENT $3.89 $9.95 $0.04 $1,915.56
CORPORATION
8/9/2010 14:20 Buy 100 GRA - W R GRACE AND CO $27.26 $9.95 $0.00 ($2,735.95)
8/9/2010 14:20 Buy 21 SCL - STEPAN COMPANY $64.14 $9.95 $0.00 ($1,356.89)
8/9/2010 14:19 Buy 389 PHK - PIMCO HIGH INCOME FUND $13.60 $9.95 $0.00 ($5,300.35)
8/9/2010 14:19 Buy 46 FRO - FRONTLINE LTD $31.50 $9.95 $0.00 ($1,458.95)
8/9/2010 14:19 Buy 127 BP - BP PLC $41.33 $9.95 $0.00 ($5,258.86)
8/9/2010 14:18 Buy 7 AAPL - APPLE INC $261.02 $9.95 $0.00 ($1,837.09)
8/6/2010 9:30 Buy 105 POM - PEPCO HOLDINGS INC $17.19 $9.95 $0.00 ($1,814.90)
8/6/2010 9:30 Sell 118 MTA - MAGYAR TELEKOM $15.80 $9.95 $0.04 $1,854.41
TELECOMMUNICATIONS PLC
8/5/2010 9:30 Buy 3 AAPL - APPLE INC $261.44 $9.95 $0.00 ($794.27)
8/5/2010 9:30 Sell 32 PVX - PROVIDENT ENERGY TRUST $6.78 $9.95 $0.01 $207.00
8/4/2010 9:30 Buy 122 UTF - COHEN AND STEERS $14.84 $9.95 $0.00 ($1,820.43)
INFRASTRUCTURE FUND INC
8/4/2010 9:30 Sell 300 PVX - PROVIDENT ENERGY TRUST $6.75 $9.95 $0.04 $2,015.01
8/3/2010 0:00
8/2/2010 9:57 Buy 23 BP - BP PLC $39.24 $9.95 $0.00 ($912.47)
7/30/2010 10:19 Buy 30 XOM - EXXON MOBIL CORP $60.19 $9.95 $0.00 ($1,815.65)
7/30/2010 10:13 Sell 150 AVP - AVON PRODUCTS INC $30.15 $9.95 $0.08 $4,512.47
7/30/2010 9:30 Sell 58 GRA - W R GRACE AND CO $24.63 $9.95 $0.03 $1,418.56
7/28/2010 11:04 Sell 50 AVP - AVON PRODUCTS INC $29.93 $9.95 $0.03 $1,486.52
7/27/2010 9:30 Buy 158 GRA - W R GRACE AND CO $26.46 $9.95 $0.00 ($4,190.63)
7/27/2010 9:30 Buy 54 FRO - FRONTLINE LTD $33.91 $9.95 $0.00 ($1,841.09)
7/27/2010 9:30 Buy 147 SYX - SYSTEMAX INC $17.15 $9.95 $0.00 ($2,531.00)
7/27/2010 9:30 Buy 29 SCL - STEPAN COMPANY $71.43 $9.95 $0.00 ($2,081.42)
7/27/2010 9:30 Buy 161 PHK - PIMCO HIGH INCOME FUND $12.75 $9.95 $0.00 ($2,062.70)
7/27/2010 9:30 Buy 332 PVX - PROVIDENT ENERGY TRUST $6.85 $9.95 $0.00 ($2,284.15)
7/27/2010 9:30 Buy 495 CIM - CHIMERA INVESTMENT $3.92 $9.95 $0.00 ($1,950.35)
CORPORATION
7/27/2010 9:30 Buy 118 MTA - MAGYAR TELEKOM $15.69 $9.95 $0.00 ($1,861.37)
TELECOMMUNICATIONS PLC
7/27/2010 9:30 Buy 44 MORN - MORNINGSTAR INC $46.02 $9.95 $0.00 ($2,034.83)
7/27/2010 9:30 Buy 30 LFC - CHINA LIFE INSURANCE COMPANY $67.69 $9.95 $0.00 ($2,040.65)
LIMITED
7/26/2010 0:00 Buy 200 AVP - AVON PRODUCTS INC $29.65 $9.95 $0.00 ($5,930.00)
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Appendix C
Appendix C provides the portfolio calculations on the last day of the portfolio as well as
the portfolio return over the three-week period.
 Covariance – The covariance of the portfolio was calculated using the excel data
analysis toolpak. The matrix was created by taking the covariance table and copying
a transposed version over the excel output. This allows for portfolio mean, variance
and standard deviation calculations.
 Portfolio Mean Return – The mean was calculated by using the excel MMULT
function which calculates the product of two matrix arrays.
 Variance and Standard Deviation – The variance was calculated by using a nested
MMULT excel formula to use the covariance matrix and the portfolio weights to
calculate the portfolio variance and standard deviation.
The portfolio on the last day consisted of the following stocks:
Ticker Weight Avg. Return

AAPL 5.955% -0.277%
BP 13.961% 0.069%
F 8.714% -0.436%
GRA 12.294% -0.020%
HPQ 9.671% -0.955%
IGD 7.682% 0.054%
MORN 4.499% -0.509%
PHK 17.423% 0.455%
POM 4.398% 0.194%
SCL 6.914% -1.325%
UTF 4.191% -0.009%
XOM 4.297% 0.054%
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The table below presents the covariance matrix created and the resulting statistical analysis.
Covariance Matrix
AAPL BP F GRA HPQ IGD MORN PHK POM SCL UTF XOM
AAPL 0.000174 0.000054 0.000159 0.000134 0.000201 0.000070 0.000146 0.000123 0.000132 0.000067 0.000112 0.000112
BP 0.000054 0.000357 0.000109 0.000091 -0.000001 0.000062 0.000167 0.000073 0.000029 0.000120 0.000142 0.000069
F 0.000159 0.000109 0.000261 0.000219 0.000134 0.000090 0.000195 0.000127 0.000131 0.000148 0.000125 0.000118
GRA 0.000134 0.000091 0.000219 0.000326 0.000118 0.000074 0.000230 0.000108 0.000079 0.000284 0.000107 0.000075
HPQ 0.000201 -0.000001 0.000134 0.000118 0.000882 0.000103 0.000226 0.000061 0.000160 0.000112 0.000153 0.000240
IGD 0.000070 0.000062 0.000090 0.000074 0.000103 0.000056 0.000092 0.000042 0.000056 0.000072 0.000072 0.000052
MORN 0.000146 0.000167 0.000195 0.000230 0.000226 0.000092 0.000253 0.000099 0.000101 0.000263 0.000137 0.000126
PHK 0.000123 0.000073 0.000127 0.000108 0.000061 0.000042 0.000099 0.000146 0.000103 0.000075 0.000084 0.000048
POM 0.000132 0.000029 0.000131 0.000079 0.000160 0.000056 0.000101 0.000103 0.000163 -0.000003 0.000093 0.000081
SCL 0.000067 0.000120 0.000148 0.000284 0.000112 0.000072 0.000263 0.000075 -0.000003 0.000573 0.000060 0.000101
UTF 0.000112 0.000142 0.000125 0.000107 0.000153 0.000072 0.000137 0.000084 0.000093 0.000060 0.000125 0.000078
XOM 0.000112 0.000069 0.000118 0.000075 0.000240 0.000052 0.000126 0.000048 0.000081 0.000101 0.000078 0.000161
mean -0.1602%
variance 0.0127%
std. dev 1.1262%
Total Return – Daily (Last Day Portfolio)
Date AAPL BP F GRA HPQ IGD MORN PHK POM SCL UTF XOM S&P 500
7/26/2010 259.28 38.65 12.94 25.84 46.57 10.73 46.02 12.56 17.07 70.00 14.40 59.96 1,115.01
7/27/2010 264.08 38.00 13.03 25.76 47.57 10.81 45.75 12.63 17.42 65.82 14.51 60.38 1,079.25
7/28/2010 260.96 37.71 12.91 25.16 47.13 10.81 44.86 12.68 17.33 65.40 14.34 60.48 1,083.61
7/29/2010 258.11 38.47 12.97 25.47 46.41 10.84 45.02 12.69 17.04 65.34 14.38 59.91 1,089.47
7/30/2010 257.25 38.47 12.77 25.67 46.04 10.94 45.10 12.70 16.91 66.01 14.46 59.26 1,121.06
8/2/2010 261.85 39.42 13.16 26.23 47.56 11.01 46.50 12.83 17.18 67.47 14.73 61.50 1,127.79
8/3/2010 261.93 40.00 12.91 25.82 47.36 11.00 45.87 12.91 17.17 65.90 14.82 62.27 1,121.64
8/4/2010 262.98 39.39 13.11 26.74 46.77 10.99 45.74 13.14 17.28 65.89 14.80 62.27 1,125.81
8/5/2010 261.70 40.68 12.98 26.74 46.35 10.95 45.66 13.22 17.23 64.12 14.90 62.26 1,127.24
8/6/2010 260.09 41.33 13.04 26.78 41.85 10.96 45.25 13.35 17.33 63.09 14.89 61.53 1,120.46
8/9/2010 261.75 40.86 13.05 27.39 42.60 11.00 45.92 13.47 17.56 64.88 14.91 62.01 1,125.86
8/10/2010 259.41 40.11 12.92 26.77 42.33 10.98 44.71 13.42 17.70 61.71 14.90 61.49 1,101.60
8/11/2010 250.19 38.79 12.41 26.07 40.77 10.79 43.11 12.96 17.22 59.76 14.43 60.39 1,101.53
8/12/2010 251.79 38.38 12.27 25.88 40.14 10.70 42.81 13.22 17.26 59.06 14.31 60.23 1,106.13
8/13/2010 249.10 38.93 12.15 25.71 40.45 10.71 42.77 13.25 17.52 57.84 14.37 59.91 1,113.84
Dividends
7/26/2010
7/27/2010
7/28/2010
7/29/2010
7/30/2010
8/2/2010 0.100
8/3/2010
8/4/2010
8/5/2010
8/6/2010
8/9/2010
8/10/2010 0.122
8/11/2010 0.440
8/12/2010
8/13/2010
Total Return - Daily

7/26/2010 - - - - - - - - - - - - -
7/27/2010 1.85% -1.68% 0.70% -0.31% 2.15% 0.75% -0.59% 0.56% 2.05% -5.97% 0.76% 0.70% -3.21%
7/28/2010 -1.18% -0.76% -0.92% -2.33% -0.92% 0.00% -1.95% 0.40% -0.52% -0.64% -1.17% 0.17% 0.40%
7/29/2010 -1.09% 2.02% 0.46% 1.23% -1.53% 0.28% 0.36% 0.08% -1.67% -0.09% 0.28% -0.94% 0.54%
7/30/2010 -0.33% 0.00% -1.54% 0.79% -0.80% 0.92% 0.18% 0.08% -0.76% 1.03% 0.56% -1.08% 2.90%
8/2/2010 1.79% 2.47% 3.05% 2.18% 3.30% 1.55% 3.10% 1.02% 1.60% 2.21% 1.87% 3.78% 0.60%
8/3/2010 0.03% 1.47% -1.90% -1.56% -0.42% -0.09% -1.35% 0.62% -0.06% -2.33% 0.61% 1.25% -0.55%
8/4/2010 0.40% -1.53% 1.55% 3.56% -1.25% -0.09% -0.28% 1.78% 0.64% -0.02% -0.13% 0.00% 0.37%
8/5/2010 -0.49% 3.27% -0.99% 0.00% -0.90% -0.36% -0.17% 0.61% -0.29% -2.69% 0.68% -0.02% 0.13%
8/6/2010 -0.62% 1.60% 0.46% 0.15% -9.71% 0.09% -0.90% 0.98% 0.58% -1.61% -0.07% -1.17% -0.60%
8/9/2010 0.64% -1.14% 0.08% 2.28% 1.79% 0.36% 1.48% 0.90% 1.33% 2.84% 0.13% 0.78% 0.48%
8/10/2010 -0.89% -1.84% -1.00% -2.26% -0.63% -0.18% -2.64% 0.53% 0.80% -4.89% -0.07% -0.84% -2.15%
8/11/2010 -3.55% -3.29% -3.95% -2.61% -3.69% -1.73% -3.58% -3.43% -2.71% -3.16% -3.15% -1.07% -0.01%
8/12/2010 0.64% -1.06% -1.13% -0.73% -1.55% -0.83% -0.70% 2.01% 0.23% -1.17% -0.83% -0.26% 0.42%
8/13/2010 -1.07% 1.43% -0.98% -0.66% 0.77% 0.09% -0.09% 0.23% 1.51% -2.07% 0.42% -0.53% 0.70%
Average -0.277% 0.069% -0.436% -0.020% -0.955% 0.054% -0.509% 0.455% 0.194% -1.325% -0.009% 0.054% 0.002%
Variance 0.019% 0.038% 0.028% 0.035% 0.095% 0.006% 0.027% 0.016% 0.018% 0.062% 0.013% 0.017% 0.020%
Std. Dev. 1.370% 1.960% 1.678% 1.875% 3.083% 0.779% 1.652% 1.254% 1.324% 2.484% 1.161% 1.318% 1.410%
Weight 5.955% 13.961% 8.714% 12.294% 9.671% 7.682% 4.499% 17.423% 4.398% 6.914% 4.191% 4.297%
16
Benchmark Comparisons (Actual Portfolio)
Three-Week Performance Data
MSCI Large
Net Portfolio Russell 1000 Cap Value
Date Value Value Index Index S&P 500
7/26/2010 24,996.05 572.73 1,382.55 1,115.01
7/27/2010 24,272.56 572.58 1,384.58 1,079.25
7/28/2010 23,984.76 568.00 1,375.49 1,083.61
7/29/2010 24,172.93 566.21 1,371.98 1,089.47
7/30/2010 24,092.09 566.35 1,371.39 1,121.06
8/2/2010 24,606.85 579.19 1,402.74 1,127.79
8/3/2010 24,424.73 575.71 1,397.12 1,121.64
8/4/2010 24,507.12 578.65 1,404.13 1,125.81
8/5/2010 24,449.45 577.92 1,403.94 1,127.24
8/6/2010 24,397.36 575.68 1,397.60 1,120.46
8/9/2010 24,550.78 578.84 1,404.67 1,125.86
8/10/2010 23,896.93 575.17 1,397.95 1,101.60
8/11/2010 21,971.65 558.29 1,360.01 1,101.53
8/12/2010 21,858.15 556.59 1,357.01 1,106.13
8/13/2010 21,856.51 554.90 1,352.48 1,113.84
Total Return – Daily (Actual Portfolio)
Total Return - Daily
Russell MSCI Large

1000 Value Cap Value
Portfolio Index Index S&P 500
-2.894% -0.026% 0.147% -3.207%

-1.186% -0.800% -0.657% 0.404%
0.785% -0.315% -0.256% 0.541%
-0.334% 0.025% -0.043% 2.900%
2.137% 2.267% 2.287% 0.600%
-0.740% -0.601% -0.401% -0.545%
0.337% 0.511% 0.502% 0.372%
-0.235% -0.126% -0.014% 0.127%
-0.213% -0.388% -0.451% -0.601%
0.629% 0.549% 0.506% 0.482%
-2.663% -0.634% -0.478% -2.155%
-8.057% -2.935% -2.714% -0.006%
-0.517% -0.305% -0.221% 0.418%
-0.008% -0.304% -0.333% 0.697%
Avg. -0.926% -0.220% -0.152% 0.002%

Variance 0.059% 0.012% 0.011% 0.020%
Std. Dev 2.426% 1.092% 1.040% 1.410%
17
Cumulative Wealth Index Data
MSCI Large
Net Portfolio Russell 1000 Cap Value
Date Value Value Index Index S&P 500
7/27/2010 0.971 1.000 1.001 0.968
7/28/2010 0.960 0.992 0.995 0.972
7/29/2010 0.967 0.989 0.992 0.977
7/30/2010 0.964 0.989 0.992 1.005
8/2/2010 0.984 1.011 1.015 1.011
8/3/2010 0.977 1.005 1.011 1.006
8/4/2010 0.980 1.010 1.016 1.010
8/5/2010 0.978 1.009 1.015 1.011
8/6/2010 0.976 1.005 1.011 1.005
8/9/2010 0.982 1.011 1.016 1.010
8/10/2010 0.956 1.004 1.011 0.988
8/11/2010 0.879 0.975 0.984 0.988
8/12/2010 0.874 0.972 0.982 0.992
8/13/2010 0.874 0.969 0.978 0.999
18
Appendix D
Appendix D shows the RiskGrades.com reports for each day of the portfolio, showing
how the risk in the portfolio varies.
July 27th
Mouse over dot for Full name and Statistics.
 This portfolio's RiskGrade™ of 138 suggests Speculative

Plan investment strategy.
 Diversification benefits have lowered this portfolio's risk
by 22%.
 This portfolio is 1.31 times as volatile as the S&P - S&P
500 Index.
Risk Diversification Market

XLoss™
Grade™ Benefit Value
July 27 138 41 $994 $26,816
19
Risk Risk Market
XLoss™
Grade™ Impact™ Value
Asset Class July 27
Equities 138 100% $994 $26,816
RiskGrade
Select statistic to view:
Risk Risk Market

XLoss™
Instrument July 27
AVP 143 17% $251 $5,880

GRA 227 20% $215 $4,062
PHK 112 4% $84 $2,133
PVX 147 6% $97 $2,112
LFC 113 4% $73 $1,928
CIM 139 5% $100 $1,916
SYX 370 14% $125 $1,890
MORN 112 4% $50 $1,882
MTA 194 6% $103 $1,765
SCL 226 7% $95 $1,677
FRO 240 8% $94 $1,571
20
RiskGrade
Results
Comparison of Portfolio(July 27) against the stocks in S&P 500.
RiskRanking Chart
Portfolio(July 27) has a rank of 33%.

In other words 67% of the stocks in S&P 500 are riskier than Portfolio(July 27).
Portfolio(July 27) RiskGrade: 138
About the stocks in S&P 500:
Minimum RiskGrade in the group: 66. Maximum RiskGrade in the group: 861.
Average RiskGrade: 168.
21
July 28
 This portfolio's RiskGrade™ of 140 suggests

Speculative Plan investment strategy.
 Diversification benefits have lowered this portfolio's
risk by 23%.
 This portfolio is 1.32 times as volatile as the S&P -
S&P 500 Index.

XLoss™
July 28 140 42 $948 $25,346
22
Risk Risk Market
XLoss™
Asset Class July 28
Equities 140 100% $948 $25,346
RiskGrade
Risk Risk Market

XLoss™
Instrument July 28
AVP 143 13% $188 $4,410

GRA 227 21% $215 $4,062
PHK 112 4% $84 $2,133
PVX 147 6% $97 $2,112
LFC 113 5% $73 $1,928
CIM 139 5% $100 $1,916
SYX 370 15% $125 $1,890
MORN 112 5% $50 $1,882
MTA 194 7% $103 $1,765
SCL 226 7% $95 $1,677
FRO 240 8% $94 $1,571
RiskGrade
23
risk by 23%.
S&P 500 Index.

XLoss™
July 28 140 42 $948 $25,346
Risk Risk Market

XLoss™
Instrument July 28
AVP 143 13% $188 $4,410
24
GRA 227 21% $215 $4,062
PHK 112 4% $84 $2,133
PVX 147 6% $97 $2,112
LFC 113 5% $73 $1,928
CIM 139 5% $100 $1,916
SYX 370 15% $125 $1,890
MORN 112 5% $50 $1,882
MTA 194 7% $103 $1,765
SCL 226 7% $95 $1,677
FRO 240 8% $94 $1,571
RiskGrade
Results
RiskRanking Chart

25
July 30

risk by 24%.
S&P 500 Index.

XLoss™
July 30 135 43 $728 $20,162
26
Risk Risk Market
XLoss™
Asset Class July 30
Equities 135 100% $728 $20,162
RiskGrade
Risk Risk Market

XLoss™
Instrument July 30
PHK 112 5% $84 $2,133

PVX 147 8% $97 $2,112
LFC 113 6% $73 $1,928
CIM 139 7% $100 $1,916
SYX 370 19% $125 $1,890
MORN 112 6% $50 $1,882
XOM 108 5% $50 $1,797
MTA 194 9% $103 $1,765
SCL 226 9% $95 $1,677
FRO 240 11% $94 $1,571
GRA 227 10% $79 $1,491
RiskGrade
27
RiskRanking Chart

28
August 2

risk by 26%.
S&P 500 Index.

XLoss™
August 2 133 49 $748 $21,058
29
Risk Risk Market
XLoss™
Asset Class August 2
Equities 133 100% $748 $21,058
RiskGrade
Risk Risk Market

XLoss™
Instrument August 2
PHK 112 5% $84 $2,133

PVX 147 8% $97 $2,112
LFC 113 6% $73 $1,928
CIM 139 6% $100 $1,916
SYX 370 18% $125 $1,890
MORN 112 6% $50 $1,882
XOM 108 5% $50 $1,797
MTA 194 9% $103 $1,765
SCL 226 9% $95 $1,677
FRO 240 11% $94 $1,571
GRA 227 10% $79 $1,491
BP 297 3% $66 $895
RiskGrade
30
Comparison of Portfolio(August 2) against the stocks in S&P 500.
RiskRanking Chart
Portfolio(August 2) has a rank of 30%.

In other words 70% of the stocks in S&P 500 are riskier than Portfolio(August 2).
Portfolio(August 2) RiskGrade: 133
August 4
31
risk by 26%.
S&P 500 Index.

XLoss™
August 4 133 47 $727 $20,903
Risk Risk Market

XLoss™
Equities 133 100% $727 $20,903
32
RiskGrade
Risk Risk Market

XLoss™
Instrument August 4
PHK 112 5% $84 $2,133

LFC 113 6% $73 $1,928
CIM 139 6% $100 $1,916
SYX 370 19% $125 $1,890
MORN 112 6% $50 $1,882
XOM 108 5% $50 $1,797
MTA 194 9% $103 $1,765
UTF 117 6% $63 $1,753
SCL 226 9% $95 $1,677
FRO 240 11% $94 $1,571
GRA 227 10% $79 $1,491
BP 297 3% $66 $895
PVX 147 0% $9 $204
RiskGrade
33
Results
RiskRanking Chart

August 5
34
risk by 26%.
S&P 500 Index.

XLoss™
August 5 132 47 $740 $21,447
Risk Risk Market

XLoss™
Equities 132 100% $740 $21,447
RiskGrade
Risk Risk Market

XLoss™
Instrument August 5
35
PHK 112 5% $84 $2,133
LFC 113 6% $73 $1,928
CIM 139 6% $100 $1,916
SYX 370 18% $125 $1,890
MORN 112 6% $50 $1,882
XOM 108 5% $50 $1,797
MTA 194 9% $103 $1,765
UTF 117 6% $63 $1,753
SCL 226 9% $95 $1,677
FRO 240 11% $94 $1,571
GRA 227 10% $79 $1,491
BP 297 3% $66 $895
AAPL 135 2% $29 $747
RiskGrade

RiskRanking Chart

August 6
36
risk by 26%.
S&P 500 Index.

XLoss™
August 6 126 46 $710 $21,521
Risk Risk Market

XLoss™
37
Equities 126 100% $710 $21,521
RiskGrade
Risk Risk Market

XLoss™
Instrument August 6
PHK 112 5% $84 $2,133

LFC 113 6% $73 $1,928
CIM 139 6% $100 $1,916
SYX 370 19% $125 $1,890
MORN 112 6% $50 $1,882
POM 113 5% $56 $1,840
XOM 108 6% $50 $1,797
UTF 117 6% $63 $1,753
SCL 226 9% $95 $1,677
FRO 240 11% $94 $1,571
GRA 227 10% $79 $1,491
BP 297 3% $66 $895
AAPL 135 3% $29 $747
RiskGrade
38
RiskRanking Chart

August 9
39
 Diversification benefits have lowered this portfolio's risk by
31%.
 This portfolio is 1.18 times as volatile as the S&P - S&P 500
Index.

XLoss™
August 9 125 58 $986 $29,971
Risk Risk Market

XLoss™
Equities 125 100% $986 $29,971
RiskGrade
40
Risk Risk Market
XLoss™
Instrument August 9
PHK 112 9% $204 $5,154

BP 297 19% $366 $4,944
GRA 227 12% $136 $2,571
LFC 113 4% $73 $1,928
CIM 139 4% $100 $1,916
SYX 370 12% $125 $1,890
MORN 112 4% $50 $1,882
POM 113 4% $56 $1,840
XOM 108 4% $50 $1,797
UTF 117 4% $63 $1,753
AAPL 135 4% $67 $1,744
FRO 240 6% $80 $1,338
SCL 226 4% $68 $1,215
RiskGrade
Results

RiskRanking Chart

41
August 10

risk by 29%.
S&P 500 Index.

XLoss™
August 10 131 55 $1,092 $31,798
42
Risk Risk Market
XLoss™
Equities 131 100% $1,092 $31,798
RiskGrade
Risk Risk Market

XLoss™
Instrument August 10
PHK 112 8% $204 $5,154

BP 297 17% $366 $4,944
HP 194 14% $204 $3,742
GRA 227 10% $136 $2,571
LFC 113 3% $73 $1,928
SYX 370 11% $125 $1,890
MORN 112 4% $50 $1,882
POM 113 3% $56 $1,840
XOM 108 4% $50 $1,797
UTF 117 4% $63 $1,753
AAPL 135 4% $67 $1,744
FRO 240 6% $80 $1,338
SCL 226 4% $68 $1,215
RiskGrade
43
risk by 29%.
S&P 500 Index.

XLoss™
August 10 131 55 $1,092 $31,798
Risk Risk Market

XLoss™
Equities 131 100% $1,092 $31,798
RiskGrade
44
Risk Risk Market
XLoss™
PHK 112 8% $204 $5,154

BP 297 17% $366 $4,944
HP 194 14% $204 $3,742
GRA 227 10% $136 $2,571
LFC 113 3% $73 $1,928
SYX 370 11% $125 $1,890
MORN 112 4% $50 $1,882
POM 113 3% $56 $1,840
XOM 108 4% $50 $1,797
UTF 117 4% $63 $1,753
AAPL 135 4% $67 $1,744
FRO 240 6% $80 $1,338
SCL 226 4% $68 $1,215
RiskGrade
45
Results

RiskRanking Chart

August 11

 Diversification benefits have lowered this portfolio's risk by
28%.
 This portfolio is 1.29 times as volatile as the S&P - S&P 500
Index.

XLoss™
August 11 137 55 $1,201 $33,515
46
Risk Risk Market
XLoss™
Equities 137 100% $1,201 $33,515
RiskGrade
Risk Risk Market

XLoss™
PHK 112 7% $204 $5,154

BP 297 15% $366 $4,944
HP 194 13% $204 $3,742
F 200 12% $188 $3,645
GRA 227 10% $136 $2,571
SYX 370 10% $125 $1,890
MORN 112 4% $50 $1,882
47
POM 113 3% $56 $1,840
XOM 108 3% $50 $1,797
UTF 117 4% $63 $1,753
AAPL 135 3% $67 $1,744
FRO 240 5% $80 $1,338
SCL 226 3% $68 $1,215
RiskGrade
Results
RiskRanking Chart

August 12
48
risk by 28%.
S&P 500 Index.

XLoss™
August 12 123 50 $1,166 $33,500
Risk Risk XLoss™ Market
49
Equities 123 100% $1,166 $33,500
RiskGrade
Risk Risk Market

XLoss™
PHK 112 8% $204 $5,154

BP 297 18% $366 $4,944
HP 194 14% $204 $3,742
F 200 14% $188 $3,645
IGD 118 6% $157 $3,213
GRA 227 11% $136 $2,571
MORN 112 4% $50 $1,882
POM 113 3% $56 $1,840
XOM 108 4% $50 $1,797
UTF 117 4% $63 $1,753
AAPL 135 4% $67 $1,744
SCL 226 4% $68 $1,215
RiskGrade
50
Results
RiskRanking Chart

References
Investment Company Institute, 2010 Investment Company Factbook. Retrieved from
http://www.icifactbook.org/
Jones, Charles P., 2010. Investments, Analysis and Management, John Wiley & Sons, Inc.
MSCI Large Cap Value Index. Retrieved from
'http://www.mscibarra.com/products/indices/domestic_equity_indices/us/performance.
html
Ritter, Jay R, 2003. "Behavorial Finance", Pacific-Basin Finance Journal, Vol. 11, No.4
Russell 1000 Value Index. Retrieved from
http://finance.yahoo.com/q/hp?s=%5ERLV+Historical+Prices
51
Soe, A., and Dash, S. (2008). Dividend Investing, Standard & Poor's, October. Retrieved from
http://www2.standardandpoors.com/spf/pdf/index/Dividend_Investing.pdf
S&P 500 Index. Retrieved from
http://finance.yahoo.com/q/hp?s=%5EGSPC&a=06&b=26&c=2010&d=07&e=13&f=20
10&g=d
52

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Creating a Portfolio through Financial Research

fund, covering investment research, portfolio construction, portfolio management, trading

strategies and portfolio performance after the three-week period.

estate, commodities, etc., as well as industry and sector investment classes.

real estate investment trusts which produce income for investors.

Assets can also be classified by the company characteristics, such as market

capitalization, lifecycle stage, valuation perception, income producing, etc.

cyclicals (aerospace, building, equipment/machinery, chemicals, paper and packaging),

(pharmaceuticals, medical, drug companies), and technology (technology components,

information technology, electrical equipment, specialized machinery, precision instruments).

sends them in that direction.

comparable to your portfolio.

Determining Investment Goals – Time, Risk Tolerance, etc.

Realistically, I would need an investment portfolio to produce above average returns – 8% -

1.25 and above and closer to 1, if they pay dividends.

when I think it is advantageous.

Stock Screens and Initial Stock Selections

Screen Field Yield Screen Growth Screen

Income Growth Other

Comparative Portfolio Benchmarks

To determine how well a portfolio performs, it needs to be compared against a similar

as well as the S&P 500.

Typically, managers of actively managed funds make up to three primary management

Trading Strategies – Behavioral Finance

motivated by numerous “irrational” forces; other investors, recognizing these mistakes in

for their particular portfolio.

which creates a self-reinforcing herding effect” (Jones, Charles, 2010, p. 319).

increasingly be part of mainstream finance for some.

create temporary opportunities for short-term superior gains.

Cohen and Steer’s investment fund.

significantly longer to reflect the benefit of dividends.

Total Daily Return

portfolio changed over time.

RiskGrade Score Over Time

Diversification Benefit Over Time

detailed calculations are contained in Appendix C.

My portfolio was described as an income-equity type of portfolio, comparable to Large

benchmarks and the S&P 500.

Cumulative Wealth Index Benchmark

because it is a difficult thing to do.

Income Stock Screen

the portfolio return over the three-week period.

and standard deviation calculations.

function which calculates the product of two matrix arrays.

calculate the portfolio variance and standard deviation.

The portfolio on the last day consisted of the following stocks:

Ticker Weight Avg. Return

Total Return - Daily

Three-Week Performance Data

Total Return – Daily (Actual Portfolio)

Total Return - Daily

Russell MSCI Large

-2.894% -0.026% 0.147% -3.207%

Avg. -0.926% -0.220% -0.152% 0.002%

how the risk in the portfolio varies.

Mouse over dot for Full name and Statistics.

 This portfolio's RiskGrade™ of 138 suggests Speculative

Risk Diversification Market

Equities 138 100% $994 $26,816

Risk Risk Market

AVP 143 17% $251 $5,880

Comparison of Portfolio(July 27) against the stocks in S&P 500.

Portfolio(July 27) has a rank of 33%.

Portfolio(July 27) RiskGrade: 138