The Investing section of the blog is designed to be your roadmap for building solid investing knowledge and learning how to manage a portfolio effectively. Think of it as two main layers: core investing knowledge and portfolio building. This is where concepts like CAPM, market efficiency, asset allocation, and practical investing strategies live.
1. Core Investing Knowledge
Before building an effective portfolio, it’s crucial to understand the underlying concepts that drive markets and investments. Here you’ll find posts that explain how markets work, the assumptions behind classical models, and the real-world evidence:
Market efficiency in the real world and How efficient are markets really provide a critical overview of how efficient markets truly are and what this means for investors.
To understand the historical and theoretical roots, start with The origins of market efficiency.
For CAPM, its assumptions, and its core principles, read The basics of CAPM: assumptions, market… and Beta, SML and the heart of CAPM. To explore critiques and empirical evidence around alpha, check Alpha evidence and critiques of CAPM.
These posts give you the theoretical foundation to understand markets and financial instruments, enabling you to make more informed and structured investment decisions.
2. Portfolio Building
Once you understand the key concepts, the next step is learning to build and manage a portfolio that aligns with your goals and risk tolerance. This includes asset allocation, diversification, risk management, and practical tools like ETFs and bonds:
Understanding asset allocation and… and Asset allocation explain how to distribute capital across different asset classes to optimize risk and return.
For building efficient portfolios, read Efficient frontier in practice, which shows how to apply theoretical concepts to real-world portfolios.
Managing ETFs is essential for modern investors: How to choose the right ETF, ETFs: tracking difference, tracking error and TER, and ETFs advantages guide you in selecting and using them effectively.
Don’t overlook risk and behavioral factors: Managing panic selling and Navigating investment timing errors provide practical advice on avoiding common mistakes.
For those looking to dive deeper into diversification and portfolio construction, consider Correlation and diversification and Rebalance your portfolio. These articles show how to keep your portfolio aligned with your strategy over time while adapting to dynamic markets.
3. How to Use This Map
The key to making the most of the Investing section is to follow a layered approach:
Start with fundamental concepts on markets, CAPM, and market efficiency.
Move on to portfolio construction, asset allocation, ETFs, and risk management.
Integrate advanced readings on diversification, rebalancing, and practical strategies to consolidate your knowledge.
This way, you’ll not only understand the theory but also know how to apply it in practice, creating a structured and informed approach to investing.