Understanding The Sharpe Ratio

Since the Sharpe ratio was derived in 1966 by William Sharpe, it has been one of the most referenced risk/return measures used in finance, and much of this popularity can be attributed to its simplicity. The ratio's credibility was boosted further when Professor Sharpe won a Nobel Memorial Prize in Economic Sciences in 1990 for his work on the capital asset pricing model (CAPM). In this article, we'll show you how this historic thinker can help bring you profits. (To find out more on this subject, see The Capital Asset Pricing Model: An Overview and The Sharpe Ratio Can Oversimplify Risk.)

9 Places Where You Can Retire and Live Like a King

Whatever your age, retirement should be an opportunity to do all the things that you always wanted to do, but were too busy to try. Perhaps you’ll pursue a neglected hobby or even launch another business but this time from a more exotic locale. From changes in scenery to endless recreation, business tax breaks to huge exchange rate benefits, a number of international locations are well-worth consideration as retirement destinations. For those not yet looking to retire, they make good vacation getaways as well:

http://www.mint.com/blog/goals/9-places-where-you-can-retire-and-live-like-a-king/

7 Money Tricks Rich Guys Know

My dad taught me how to rig a mainsail, my college buddies taught me how to hold my Jim Beam, and my teachers taught me how to parse Chaucer. But somehow no one got around to helping me calculate compound interest or build a diversified portfolio. Arcane skills? Perhaps, but learning them is the best way to avoid spending your retirement years nibbling on Alpo. 

Of course, people teach only what they know, and previous generations had less cause to study the finer points of finance, says Charles Farrell, a Denver-based investment advisor. Most men died within a few years of retirement; the rest squeaked by on pensions and Social Security. Today, employer pension plans are largely history and Social Security is endangered, leaving us to rely on our own savings during our waning years. And with life expectancies rising, we'd better be prepared to grow those savings and make them last. "This generation has to figure out how to afford to live off its investments for 20 to 30 years," Farrell says. "It's never been tried before."

Ensuring your financial survival will require learning to be your own CFO. Herewith, seven skills to help begin your education. 

Read more: http://www.menshealth.com/fitinvestor/moneytricks.html

Secrecy deal with Switzerland could let Britons avoid £40bn in taxes

Wealthy Britons could dodge £40bn in tax payments after the UK agreed ahead of negotiations on a tax deal with Switzerland that the country could maintain its traditional banking secrecy.

Thousands of higher rate taxpayers, who pay 50% tax on their income in the UK, will be allowed to keep their secret accounts in Zurich and Geneva and pay a low tax rate after the Treasury failed to secure agreement on sharing bank details.

Read the whole story: http://www.guardian.co.uk/business/2010/oct/26/tax-avoidance-switzerland-agreement

How ETFs Can Help You Avoid Investing Mistakes

For decades, financial theories were based on the assumption that all market participants were rational decision makers, acting in their own self-interest. This simplifying assumption led to great insights like Harry Markowitz’s Modern Portfolio Theory and practical applications like index funds with their low costs and difficult-to-beat returns. However, recent academic work has focussed on a more realistic view of the market where investors often act irrationally, as many economists felt that the previous economic framework insufficiently described what they observed in reality. It doesn’t take a PhD to realise that humans make mistakes.

Read more:  http://www.morningstar.co.uk/uk/news/article.aspx?lang=en-GB&articleid=90508&categoryid=656

30 Free eBooks To Learn Everything You Want to Know About Personal Finance

When you reach into a broad-ranging topic like personal finance, you find everyone and their cousin trying to reach across the Internet to give you advice. There’s so much information there that it can literally be overwhelming; there’s literally too much for the average person to sort through.
Luckily for you, at Mint we’re looking to quash that “intimidation” factor. There’s no reason that personal finance can’t be thoughtful, cohesive, and comprehensive, so we’ve probed through the web to find 30 free e-Books/booklets across the topics you’ll reference most.
We’ve sorted these e-Books into specific categories, along with a brief description we’ve written up on each of them. Everything is in PDF format, so if an e-Book strikes your fancy, consider downloading a copy by right-clicking on the link, then clicking “Save As.”

http://blog.mint.com/blog/finance-core/30-free-ebooks-to-learn-everything-you-want-to-know-about-personal-finance/

Visual Guide to Deflation

Deflation is inflation’s polar opposite. It’s what happens when prices go down and you get more bang for your buck. Sounds good right? But deflation, like inflation is complicated and much less understood than inflation. It can lead to what’s called the deflationary spiral and grind the whole economy to a halt.

Read the whole piece here: http://www.mint.com/blog/finance-core/a-visual-guide-to-deflation/