So this is how the saying goes, “all roads lead to Rome.” Now if only that's true for making money in the equity market.

See, there's a whole variety of tools available for investors pitching to be “your professional stock picker” or your “leading securities and investment broker”

Or promises that you'll “be empowered to make informed trading decisions.”

etc etc.

Whichever tool you use, fundamental analysis, technical analysis, behaviourial analysis, at the end of the day, you just want to make money.

The question is, how much? And at what risk?

Now lets just take a look at how useful these reports are to a typical investor. Over here you see what's going on with the company being analysed. You get some number crunched into your EBITDA, PE RATIO, EPS etc and then they tell you what action to take – to buy, sell, hold or avoid and oh goody, at which price.

We get more numbers and derivations in the next page.

And then you have a disclaimer which in this chunk of words has this nugget of a sentence, “This
document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice.”

I see. So I guess I can't really trust them huh.

Well the thing is this, you can only trust yourself to make the decisions in your trade. You make a profit, the reward is all yours, you make a loss, well, you'll be the only one bearing it.

Nobody is going to play charity when it comes to investing.

So aside from going to other people for advice and help, I learnt about this tool back in school which may give you another perspective on your investing decisions.

It's called the Markowitz Portfolio model which was published in the Journal of Finance in 1952.

Basically, by using the Microsoft Excel, you should be able to find out the optimal combinations of risk and return for your portfolio.

So say, you want 15% returns . Punch in the right numbers and formula, you get an idea of how you should assign different weightage to different stocks on your portfolio. Pretty nifty actually.

And the best thing is, it's free. Just google for it.

But i'll have to add a disclaimer now, This is just another optional tool you might want to consider. We're not allowed to give financial advice!

But hey if you can't find it online, I'll be glad to provide you a copy of my school notes containing instructions if you just drop a comment here.

Labels: Excel, Fundamental, Markowitz Model, Technical