FAQs

Our Personalised Portfolio Program is perfect for Buy & Hold investors. Buy & Hold investors will  benefit from our numerous portfolio analysis reports and back testing. We can guide you through your risk management and diversification as well as helping with rebalancing and stock selection.

Your risk profile is the evaluation of you willingness to risk and the ability you have to take that risk. It is a key component in determining the proper investment asset allocation for your profile.

Diversification is a strategy that mixes a wide variety of investments within a portfolio. The portfolio can be diversified across asset class as well as within asset classes. It can be diversified geographically by investing in both domestic and international markets.  Diversification limits risk but it can sometimes mitigate performance, at least in the short term.

Yes, there is a large variety of subscription based data feeds available with Interactive Brokers. Several of the fees are waived provided you do a certain number of  trades within a month – normally just 1 or 2 depending on the instrument you are trading.

The Sharp ratio can be used to evaluate the total performance of an individual stock or an aggregate portfolio. It indicates how well an investment performs in comparison to the rate of return on risk-free investments. A high Sharpe ratio is good when compared to similar portfolios with lower returns.

Variance is a measurement of the spread between numbers in a data set. It is used to see how much risk an investment carries and whether it will be profitable. It is also used to compare the relative performance of each asset in a portfolio to achieve the best asset allocation.

Post Modern Portfolio Theory is a methodology used for portfolio optimisation that utilises the downside risk of returns. Like Modern Portfolio Theory it details how risk assets should be valued while stressing the benefits of diversification, with the difference being how they define risk and it’s impact on returns. For a more detailed insight in to PMPT check out Investopedia. 

As explained in Investopedia the efficient frontier comprises investment portfolios that offer the highest expected return for a specific level of risk.  Returns are dependent on the investment combinations that make up the portfolio and optimal portfolios that comprise the efficient frontier tend to have a higher degree of diversification. The standard deviation of a security is synonymous with risk. Lower covariance between portfolio securities results in lower portfolio standard deviation.

According to Investopedia – Technical analysis is a trading discipline employed to evaluate investments and identify trading opportunities in price trends and patterns seen on charts. Technical analysts believe past trading activity and price changes can be valuable indicators of future price movements.

It may be contrasted with fundamental analysis which focuses on a company’s financials rather than historical price patterns or stock trends.

Back testing assesses the viability of a trading strategy by discovering how it would have played out retrospectively using historical data.  The theory being if it worked well in the past it will possibly work well in the future.

Trading indicators are mathematical calculations the produce pattern based signals produced by analysing historical data. Technical analysts use indicators to predict future price movement. There are literally hundreds of different indicators some called leading indicators and others lagging indicators. It is important when trading not to get bogged down by introducing too many indicators in to your trading decisions.

A benchmark is a standard with which to measure performance. When investing in the US stock market you may choose a market index such as the S&P 500 or the Dow Jones 100.  Depending on the particular investment strategy the benchmark may differ, if you are in to technology for example you may choose the Nasdaq.  It is important to choose the appropriate benchmark to suit your investment style. 

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It is a stock indicator that is commonly used in technical analysis. It helps to smooth out the price data over a specified period of time – 10 day, 20 day, 50 day.  There are several different types of moving averages:

Simple which is calculated by taking the arithmetic mean of a given set of prices over the specific number of days.

Exponential which is weighted giving greater importance to the price of a stock on more recent days, making it an indicator that is more responsive to new information.

This is a very popular indicator because it is easy to understand and has a high degree of accuracy.  It shows when a stock has moved in to an overbought or oversold position thus indicating whether it is time to buy or sell a security.  It is often used in conjunction with the RSI indicator.

They are a momentum indicator designed to identify when a security is oversold or overbought. The are a set of trend-lines plotted 2 standard deviations (positively & negatively) away from a simple moving average of the security’s price. It can be adjusted according to a traders own preference.

The Relative Strength Index is a momentum indicator, it provides technical traders signals about bullish and bearish price moment.  A security is usually considered overbought when the RSI is above 70% and oversold when it is below 30%.

MACD stands for Moving Average Convergence Divergence is a momentum indicator that follows trends. It shows the relationship between 2 moving averages of a securities price. The trigger signals are when it crosses above (to buy) or below (to sell) it’s signal line. It helps traders to understand whether the bullish or bearish movement in the price is strengthening or weakening.

Pivot points are commonly used by day traders, they are an intraday technical indicator used to identify trends and reversals. They are calculated to determine levels in which the sentiment of the market COULD change from bullish to bearish and vice versa. Day traders use them to calculate entry, exit, stops and profit taking.

It is a Stop and Reverse indicator used by technical traders to spot trends and reversals. It is a series of dots superimposed onto a price chart which indicates that a reversal may occur when the dot goes from above to below the chart or vice versa.

It is a collection of technical indicators that can show support and resistance levels as well as trend direction and momentum. It is composed of 5 calculations, 2 of which compose a cloud where the difference between the 2 lines is shaded in. Simply put when the price is below the cloud the trend is down and when it is above the cloud the trend is up. The trend is considered stronger if the cloud is moving in the same direction as the price. 

Fibonacci retracement levels are horizontal lines that indicate where support and resistance may occur. They are based on Fibonacci numbers, each level being associated with a percentage. The connect any 2 points that the trader views as relevant, typically a high and a low.  The percentage levels provided are areas where the price could stall or reverse.

This is an approved retirement fund.  It is a post retirement investment plan for the proceeds of any of the following:

• Defined Contribution Scheme
• Additional Voluntary Contributions
• Personal Retirement Savings Account
• Retirement Annuity Contract
• Buy out  Bond (where the benefits from a defined benefit or defined contribution scheme were transferred in to a buy out bond)
• In the case of a 5% Director, other retirement benefits that are not taken in the form of a lump sum or pension on retirement.

Certain qualifying conditions must be met in order for you to be eligible to transfer your funds to an ARF.  Please check out The Pensions Authority for further information. 

A Personal Retirement Bond is a special type of personal pension contract, where the only premium payment comes from a transfer from an occupational pension scheme. There are several rules around the transfer for such funds. Please check out The Pensions Authority for more detailed information. 

It is a Small Self-Administered Pension Scheme which can also be referred to as a Self-Invested Pension Plan (SIPP). It is a pension backed by your employer, an employer can establish one for any employee. Most commonly used for company directors and owners. It differs from other pension schemes where the contributions are given to a life assurance company or other financial investment company. The owner of the pension is in control of the investment decisions.

The high water mark is the highest level in value an investment fund has reached and is used as a demarcation point in determining performance fees that an investor must pay. The purpose is to protect investors from repeatedly paying a fee every time the fund earns a profit.

The Nasdaq  is a basket of the 100 largest, most actively traded stocks listed on the Nasdaq stock exchange. It includes companies from a variety of different industries except the financial industry. Listed stocks need to publicly report earnings quarterly or annually and must have an average daily trading volume of 200,000. Exceptions are made for new public companies with extremely high market capitalisations.

The Standard & Poors Index is a market capitalisation-weighted index of the 500 largest U.S.  publicly traded companies. It is a float-weighted index which means the company market capitalisations are adjusted by the number of shares publicly traded. It is widely regarded as the best gauge of large-cap US equities.

This is a stock market index is a widely watched benchmark in the US for blue chip stocks. It is a price weighted index that tracks 30 large, publicly owned companies trading on the New York Stock Exchange and the NASDAQ.

It is defined as the total market value of all outstanding shares and it  refers to how much a company is worth as determined by the stock market.  To calculate a company’s market capitalisation, multiply the number of outstanding shares b the current market value of one share. Companies are generally divided in to 3 market cap categories:

• Small Cap – $300 million to $2 Billion
• Mid Cap – $2 Billion to $10 Billion
• Large Cap – $10 Billion or more

There are no restrictions to investing in a hedge fund, provided it is within your risk tolerance profile.

In an active fund the fund manager trades it actively, based on the fund’s investment mandate. A passive fund usually tracks an index fund and rebalances periodically.