The two most common equity style measures are valuation and capitalization. Valuation style divides stocks into value, growth and core. Core is a blend in between value and growth.

The other traditional equity style measure is market capitalization (share price times the number of shares outstanding). Russell, by way of example, ranks 4,000 publicly traded U.S. companies as follows: The Russell 1000 Large Cap Index contains the top 1,000 stocks by market cap, the Midcap Index is made up of the 800 smallest names in the Russell 1000, and the Russell 2000 Small Cap Index features stocks with market caps that rank them from 1,001 to 3,000.

Style is integral to many asset allocation strategies and, as such, is a key element of modern portfolio management. Asset allocation involves a risk decision - the mix of equities, debt and alternative assets based on an investor’s particular risk tolerance - and a style decision, or a specific mix of value, growth, large and small cap and other style types.Perhaps the most well known of these so-called style effects relate to value stocks and small cap stocks.

Constructing a style portfolio is relatively straightforward.

Active style managers often take advantage of the rebalancing exercise to reallocate style weights. For example, style managers who shifted into large and mid cap growth during the tech boom of the late 1990s improved their performance, while managers who increased weightings in small cap value during the 2003 to 2006 period also enjoyed cyclical outperformance.

Finally, style classes are not static. A large cap value or small cap growth stock doesn’t stay that way forever. Valuation multiples and market caps change every day. For example, a small cap value stock that comes into favor may increase rapidly in price. Style managers will pay close attention to this “migration” between value and growth, large and small cap as they refine and rebalance their portfolio exposures.

Style is a fundamental component of portfolio management. We have seen that over time, stocks with similar style characteristics based on valuation and capitalization measures exhibit distinct return and risk performance. Style investing is one of the major components of asset allocation strategies. A style portfolio can allocate weights to reflect an investor’s views on the performance of different style classes over a long-term (strategic) or cyclical (tactical) time period.

The investment management world is divided into retail and institutional investors.  A separately managed account is a portfolio of assets under the management of a professional investment firm. SMAs differ from pooled vehicles like mutual funds in that each portfolio is unique to a single account (hence the name). The manager decides to launch a mutual fund containing these stocks and also a separately managed account offering. Assume that at the outset, the manager invests all portfolios with the same weight - both the mutual fund and the SMAs.  
Decisions the manager makes for the mutual fund - including the timing for purchase and sale of shares, dividend reinvestment and distributions - will affect all fund investors in the same way. SMAs targeted to high net worth retail investors tend to set account minimum balances between $100,000 and $5 million. For strategies designed especially for institutional managers, minimum account sizes may range from $10 million to $100 million.  For style-based investors who seek exposure to several different investment styles (e.g. large-cap value, small-cap growth) the price of entry goes up, as there will be a separate SMA, and a separate account minimum, for each style chosen. Mutual fund fees are fairly straightforward. 

Separate accounts do not come with prospectuses. Managers list their basic fee structures in a regulatory filing called a Form ADV Part 2. An investor can obtain this document by contacting the manager, but they tend not to be as widely available through unrestricted online downloads as mutual fund prospectuses. Moreover, the published fee schedule in the ADV Part 2 is not necessarily firm - it is subject to negotiation between the investor (or the investor’s financial advisor) and the money manager.

 Philosophy and Approach: Each manager has a unique investment philosophy and way of going about applying that philosophy to an investment approach. Are the manager’s incentives aligned with those of the investor? The SEC considers separate account managers to be investment advisors subject to the provisions of the Investment Advisors Act of 1940.

Performance data should be available directly from the manager, either online or through personal contact with a manager representative. 

From an investment strategy standpoint, traditional exchange-traded funds (ETFs) are designed to track indexes. While passive investing is a popular strategy among ETF investors, it isn’t the only strategy.

Passive Investing
ETFs were originally constructed to provide a single security that tracks an index and trades intraday. While the intraday trading capability is certainly a boon to active traders, it is merely a convenience for investors who prefer to buy and hold, which is still a valid and popular strategy - especially if we keep in mind the often-cited statistic that 80% of actively managed mutual funds fail to beat their benchmarks. In sum, ETFs provide a convenient and low-cost way to implement indexing, or passive management.

Active TradingDespite indexing’s track record, many investors aren’t content to settle for so-called average returns. ETFs provide the perfect tool. By allowing intraday trading, ETFs give these traders an opportunity to track the direction of the market and trade accordingly.
While ETFs are structured to track an index, they could just as easily be designed to track a popular investment manager’s top picks, mirror any existing mutual fund or pursue a particular investment objective. While actively managed ETFs run by professional money managers aren’t available in the United States, they are already on the market in Germany.

Conclusion
Active and passive management are both legitimate and frequently used investment strategies among ETF investors.

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Health insurance can be one of the best things you can get for yourself as this ensures that somehow, when the need arises, you’d get adequate healthcare. However, we know that insurers and clients always clash in the sense that they want to keep costs down while you want to make sure that your health is up.

In the past, Indemnity Insurance was the most common type of insurance and pays a portion of your medical bills. You need to spend a certain amount each year, deductibles, before you can start benefiting from it, by that time your plan will be covering about 60 to 80 percent of your medical expenses.

However, with the soaring indemnity insurance fees, a new more cost-efficient system called Health Maintenance Organizations emerged. HMOs are connected with specific hospitals, clinics, and doctors and hospitals, which then become the healthcare plan’s network. Unlike indemnity insurance, there will be no deductible and the co-payments will be, usually, low. The monthly premium you pay will cover doctor visits, hospitalization, emergency care, laboratory tests, and therapy.

For most healthcare needs HMOs can be a cheaper alternative.

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While a lot of financial advisors are interested in the welfare of their clients, there are some that see their clients only as milking cows, and with no other goal than to fill their own pockets with money.

Here are some bad advisor moves to look for:

• The use of inappropriate leverage - in theory, when you use borrowed money to invest in stocks, you will never lose since your returns will always be higher than the borrowing cost. In reality however, the use of leverage benefits your advisor, since you will have to pay a sizable amount on fees as well as commissions to your advisor, while at the same time you (not your advisor) take added risk;
• When your advisor puts you in high-cost investments - more often than not, financial advisors who serve only their own interests will not look into low-cost solutions for their clients. If you seldom trade, your advisor might steer you into an account that’s fee-based, adding dollars into your advisor’s pocket, without you benefiting from it;
• When your advisor excessively trades your account - this is an unethical practice called churning. Please note active trading, which is not unethical, may look very similar to churning, and there is a very fine line that separates the two. The practice of churning will have an overall result where your portfolio’s winners are sold much too soon, while your losses build up. This is a direct opposition a time-tested Wall Street advice that says “Cut your losses short and let your winners run.”

In conclusion, you will know if you’ve been getting bad advice since it will more often than not result in poor performance, not to mention the loss money. Always be on the alert for clues that your advisor may be serving only his interest and not yours.

There may be times when you feel that your financial advisor is not giving you the advice that’s best for the situation, and so you wonder: Is your financial advisor working for you, or is he doing all this in his own interest? Read on and find out the difference.

To be sure the financial advisors come from different backgrounds, different knowledge and levels of experience. It is only understandable that they may have varied opinions regarding a particular financial dilemma, however, some of their advice can just be downright ugly, and here’s how you can tell whether or not you’re getting good advice.

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No one can predict the future with certainty, so you cannot really expect your financial advisor not to make mistakes. There is, however, a big difference between a mistake made based on sound judgment and analysis, and one made because of lack of knowledge and carelessness.

There are two common reasons why you’re getting bad investment advice:

• The advisor places his own interest before yours; and
• Your advisor lacks knowledge and fails to observe due diligence.

Bad advice can have both short term and long term consequences. But they all have the same effect overall: loss of money. So, as an investor, you should never fully trust your financial advisor. Yes it’s good to have someone to confide to once in a while, but remember, the final decision is still yours.

Long term care insurance has been on the rise as the public came to realize that the government is unable or unwilling to pay the cost for long-term care. This has prompted a lot of people to seek help from their employers.

However, according to survey only a few employees understand what LTC insurance is all about, which is why active employee participation is, for the time being, a mere two percent.

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Basically, the provisions of individual LTC policies and those sponsored by the employer are about the same, except for the fact that in the case of the employer-sponsored policies, the employer shoulders the premium for the employees’ benefit.

The main idea behind LTC is to protect assets in case of illness or injury that requires long-term care.

To qualify for the benefits of LTC, the insured must not be incapable of doing two of the six dialy living tasks, such as eating, bathing and dressing or the insured must be suffering from dementia or other forms of severe cognitive impairment.

There’s usually an elimination or waiting period before the patient can avail of LTC insurance benefits.

Group policies may have limited benefits compared to individual individual LTC policies. However, employees may opt to purchase more coverage by paying additional premium.

On the part of the employer, premiums paid are tax deductible. Since LTC is a non-qualified benefit, it can be used as a form of incentive for employee performance.

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As globalization spreads a lot of people find themselves traveling more frequently. So, if you’re one of those travelers, your expenses can include a lot of things, such as accommodation (hotel/motel rooms, etc.) to interesting souvenirs that you find along the way. Needless to say, you must be well funded every time you travel. Now here are some pointers on how to finance your travel as well as how to avoid surcharges that are unnecessary.

Avoid excessive currency exchange fees. It is a good idea to be prepared before hand and have a few dollars, say about a hundred, exchanged for the equivalent currency of your country of destination. Use Automated Teller Machines that are affiliated with major banks. This way, you can dodge those high currency exchange charges.

Sometimes you wonder whether you should use cash or credit card when you travel. In many places, cash will be the norm, so you need to have your dollars exchanged before hand, preferably at home, to the local currency. However, some local merchants are willing to accept US dollars, so you might as well use that before exchanging your dollars into the local currency. Take note of how much the merchant is charging you in dollars, as he may be using a rate that’s favorable only to him. You should always be updated regarding the latest exchange rate by consulting financial Web sites.

Credit cards may charge you a uniform one percent conversion fee. However, you still need to confirm your credit service rates ahead of time - preferably prior to leaving home. There may also be an additional one to two percent service charge, so it is best to prepare for that. Many travelers confine the use of credit cards to hotel rooms.

No matter where you travel or for how long, you will always be needing money. The different forms of currency, and the exchange rates and fees can be mind boggling at times. A little planning ahead of time can spare you from both unnecessary expenses and headache. Doing some research can be well worth it. Bon voyage!

If you’re searching for a good house to buy at a decent rate, one of the first places you need to look at, are those being sold by banks. Banks reposess properties that their owners have not been able to pay for, mostly due to defaulting on their monthly payments.

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Since banks don’t want to get into the real estate business, they are more or less desperate to sell these houses, and will probably offer you a good bargain to get them off their books.

However, you probably don’t want to buy directly from a bank, since they are used to dealing only with professionals. Buy your property from a broker instead.

You will need to search the Internet for a full listing of these properties, and for a monthly fee, you can even use sites like Foreclosures.com or RealtyTrac.com

However, you might want to be careful about houses that have remained unsold for a long time. There’s a reason why they have not been sold, and you have to find out why. Maybe it’s in real bad shape, and to get it up and running, you may have to shell out tens of thousands of dollars.

So those of you keen on buying a place at the best pricee need to keep in mind this great resource.

Along with rising costs, comes another element that is perhaps more dangerous than inflation.  That is a feeling of helplessness. I mean what can you do to beat the rising costs of fuel? Or groceries for that matter.

Amada Gengler, a writer at CNN money, has some great ideas to beat the rising costs that harass us. Let us take a look at what they are:

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Save 33% of your gas bills

According to Amanda, the way we drive can have a significant impact on our fuel expenses. Apparently, driving at a slower steadier state, allows you to save upto 33% of your gas. This essentially means getting your foot off the pedal, and increasing the efficiency of your engine.

Take a list with you to shop

Supermarkets are laid out in such a manner, that they force you to buy things you don’t want. This is the reason for long aisles, and attractive displays. Keeping in mind your shopping list ensures that you don’t get distracted.

Also, search more for your goods. Firms pay a lot of money to get their goods on the best shelves, and so the most visible product is not necessarily the cheapest

Cut down on Vampire Appliances

Vampire appliances are those that take up energy even when not in use, like your computer which may be in suspend mode, or your Xbox. Amanda estimates that you can save upto $300 a year on these appliances.

So take heart, and follow these good strategies to keep your money in your wallet.