Personal finance
Mathieu Bouville, PhD

Asset allocation and portfolio optimization

• NEW: The CAPE (or, how to beat stocks with a 50–50 portfolio)
  Using the cyclically-adjusted P/E ratio (CAPE), one can decide when markets are too expensive and it is time to get out. With such strategies one can get the return of stocks with a portfolio which is on averge half in bonds.
  
  
• Risk and return
  Putting a limit on how much one is willing to lose also puts a limit on how much one can gain. But it is still quite possible to take more risk without prospect of a higher return. A key purpose of investors should be to maximize potential return for a given level of risk.
  
• Time matters
  What is the best strategy to take the passing of time into account? investing 30% in bonds at age 30 and 60% at 60, or using a strategy that is less arbitrary and more efficient?
  
• Drawing an income
  In "Investing: Risk and return", I looked at the situation of someone thirty years away from retirement. Here I focus on the situation of someone who wants to draw an income over thirty years. This case is more different than one may think. Using Monte Carlo simulations for a range of stock–bond portfolios, I show how large an income can safely be taken out of a portfolio.
  

Real estate

• Updated in January 2012: British property market
  Fundamental valuation and technical analysis to determine buying and selling points.
  
  
• Mortgage loans
  Mathematical treatment of borrowing: calculating monthly payments as a function of amount borrowed, length and interest rate (exact and approximation).
  

Non-quantitative write-ups

Those allergic to maths can stop running away now.

• Investing: Is investing the same as saving?
  
• Four misconceptions on risk — Risk is measured by volatility; Savings accounts cannot lose money; Risk taking is a matter of personality; The stock market is just like a casino
  Risk is an important concern for investors; but it is the source of some confusion.
  

Placer son argent J'ai écrit un livre sur les placements financiers destiné à un large public: "Votre argent mérite de vous rapporter plus" (Gualino éditeur, 270 pages, 16,80 €, à paraître début mars). [Voir sommaire et extraits.]Sommaire et extraits à www.mathieu.bouville.name/finance/Fr/Bouville-livre_epargne-extraits.pdf L'assurance-vie: Dr Euro et Mr Unité de Compte L'assurance-vie existe en deux versions très différentes : contrats en euros et en unités de comptes. Prêts immobiliers Calcul du montant des remboursements mensuels et du coût total d'un emprunt immobilier. (Document assez mathématique.)

© Mathieu Bouville, February 8^th 2012