Portfolio Construction

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Terms in Portfolio Construction

80-20 Rule & Example (Pareto Principle)

The 80-20 rule, also known as the Pareto Principle, used mostly in business and economics, states that 80% of outcomes result from just 20% of causes. read more

Advisor Account

An advisor account is an investment account where investment advisory services are included to help implement investment purchases and strategies. read more

Alpha Generator

An alpha generator is a security that generates excess returns or returns higher than a benchmark, with no added risk, when added to a portfolio. read more

Asset Allocation

Asset allocation is the process of deciding where to put money to work in the market.  read more

Churn Rate

The churn rate is the percentage of subscribers who discontinue service subscriptions within a given time. Learn how to calculate customer churn rate. read more

Cluster Analysis

Cluster analysis is a tactic used by investors to group sets of stocks together that exhibit high correlations in returns.  read more

Dedicated Portfolio

A dedicated portfolio is an investment portfolio where the cash flows are designed to match the anticipated liabilities. read more

Granular Portfolio

A granular portfolio is an investment portfolio that is well diversified across a wide variety of assets, typically with a significant number of holdings. read more

Investment Objective

An investment objective is a client information form used by asset managers that aids in determining the optimal portfolio mix for the client. read more

Joint Tenants With Right of Survivorship (JTWROS)

Joint tenants with right of survivorship (JTWROS) is a type of property ownership giving co-owners survivorship rights upon another property owner’s death. read more