Talk:Investment style

Active strategies?

Active strategies: is "dollar cost averaging" really an active strategy? And "systematic investment plan"? These can work with either passive or active styles. --Quebec 14:01, 20 January 2015 (MST)

If you look way back in time you'll see the basic skeleton of the article. That's from when finiki was just getting started, so article title generation and linking was the order of the day. This article isn't very well written or maintained and probably is due for a good cleanup. --Peculiar Investor 16:50, 20 January 2015 (MST)

I disagree with these strategies defined as Active management (per Wikipedia).

• Buy and hold
• Dollar cost averaging
• Dollar value averaging

They are a form of market timing, but do not seek to outperform the market. The out-performance is done through the type of securities. When to fund the securities (or to remove funds) is a strategy for both active and passive management. --LadyGeek 13:22, 26 December 2015 (MST)

Yes, but looking at Special:WhatLinksHere/Dollar_value_averaging for example, VA is not linked within other pages. See comment from P_I above. Where else could it be linked? --Quebec 15:35, 26 December 2015 (MST)

You could put Dollar value averaging and Dollar cost averaging into Category:Investment management, then create a Navigation template which links many of those pages together. For example, Dollar cost averaging is part of the Bogleheads' wiki Template:Portfolios. Those pages are part of Category:Portfolios, which is similar to Category:Investment management here. This is a good problem to have, as it means that finiki's content is growing. --LadyGeek 20:13, 26 December 2015 (MST)

VA and DCA are already in Category:Investment styles, which is a subdivision of Category:Investment management. Also there is a sidebar that includes VA and DCA: Template:Investment styles sidebar. So I'm not sure what you mean. --Quebec 08:11, 27 December 2015 (MST)

You are correct, I am in error. How about creating a new menu heading in the sidebar titled "Investment strategy" (for example), then move those entries under the new heading? --LadyGeek 09:12, 27 December 2015 (MST)

Reorganize active management section

As noted in the above discussion, Value averaging and Dollar cost averaging do not seek to outperform the market as defined by Wikipedia. These strategies can apply to either active or passive management and should be addressed in a new section.

Grouping all of these topics under "Active management" is not helpful to new investors.I'm not sure how the section should be titled, e.g. "Strategies" (?), but I'm also not sure if other topics, such as Stock trading, belong under Active management.

Can someone provide a review of these topics? Once this is decided, Template:Investment styles sidebar should be updated. (Also see Template talk:Investment styles sidebar for a technical problem to edit the sidebar.) --LadyGeek 18:08, 29 December 2015 (MST)

Fixed the problem with the template has been fixed.

The other issues about the structure and content of the article remain. --Peculiar Investor 18:18, 29 December 2015 (MST)

Wikipedia makes a distinction between Investment style and Investment strategy, as does Investopedia, Investment Style Definition | Investopedia and Investment Strategy Definition | Investopedia. I suspect the issue is further clouded by the fact that many mutual fund investors are somewhat familiar with Morningstar Style Box as a reference for Investment style. Our article seems to mash styles and strategies (no kitchen sink) together, largely it would appear for historical reasons from the time that finiki was started and the goal was to create article titles to build up content. It appears that the time has come to revisit the differences and perhaps split the topic into two components. --Peculiar Investor 18:33, 29 December 2015 (MST)

This seemed like deja vu all over again, and it is. See Template talk:Equities sidebar. Suggest we continue to hash it out here and proceed. --Peculiar Investor 18:56, 29 December 2015 (MST)

Discussion while rewriting

"Investment style refers to different style characteristics of equities, bonds or financial derivatives within a given investment strategy. It is the overarching strategy or theory used by either a retail investor or an institutional money manager to set asset allocation and choose individual securities for investment."

So a style is a strategy within a strategy? And it guides asset allocation? I am very confused.

Here is the way I see it: (1) define your goal, e.g. retirement at age X; (2) choose the savings rate and the AA to reach the goal; (3) within each asset class that's part of the AA, purchase stocks, bonds or funds. IMO the finiki article(s) on investment styles and strategies (and the distinction between styles and strategies is far from clear in my mind) should be concerned with number 3 only, how you will manage your money within each asset class. Also there may be a way to produce a single article on styles AND strategies to keep things simple. --Quebec 07:43, 30 December 2015 (MST)

As the edit summary suggests, I mashed together Wikipedia and Investopedia. I don't claim it all to make sense at this point. Over the course of a number of talk pages you and I have questioned strategy vs. style, I'm just trying to resolve it. I even consulting the dictionary:

Strategy:

• a careful plan or method for achieving a particular goal usually over a long period of time
• the skill of making or carrying out plans to achieve a goal
  — "Definition of Strategy by Merriam-Webster".

Style:

• a particular way in which something is done, created, or performed
• a particular form or design of something
• a way of behaving or of doing things
  — "Definition of Style by Merriam-Webster".

For historical reasons, previous wiki editors built things around the concept of Investment style. This has never worked for me, I've always considered we should be working on Investment strategy, hence my splitting most of the content of this version of Investment styles into a possible new Investment strategy article, and then beefing up what's left of Investment styles to more properly reflect the definition above. If only one article survives, my choice would be Investment strategy. --Peculiar Investor 14:00, 30 December 2015 (MST)

Market cap threshold data?

Does anyone have a good reference for the Canadian thresholds of market capitalization (mid-cap, small-cap)? The thresholds are country specific and we should provide that information in the article. --Peculiar Investor 06:36, 14 January 2016 (MST)

If you're willing to do some digging, you can find the info directly from TMX. First, I went to Stock Market Terms - Stock Market Vocabulary: Glossary of Terms | TMXmoney to find the definitions for:

• S&P/TSX 60 Index - An index of large, liquid, Canadian issuers listed on Toronto Stock Exchange. It is market capitalization weighted, with weights adjusted for available share float, and includes securities of 60 issuers balanced across ten economic sectors.

• S&P/TSX MidCap Index - An index of mid-sized Canadian issuers that have been included in the S&P/TSX Composite Index but are not members of the S&P/TSX 60 Index. It is market capitalization weighted, with weights adjusted for available share float, and includes securities of 60 issuers balanced across ten economic sectors.

• S&P/TSX SmallCap Index - An index of smaller Canadian issuers that are included in the S&P/TSX Composite Index, but have not been added to the S&P/TSX 60 Index or the S&P/TSX MidCap Index.

Next, go to the Stock Indices to grab the fact sheets for:

• S&P/TSX 60 Index (CAD) - lowest is 3,323.88 million $CAD
• S&P/TSX SmallCap Index - highest is 2,441.64 million $CAD

I could not find the mid-cap info, but it's not needed. The small- to mid-cap threshold is 2.4 Billion $CAD, mid- to large-cap is 3.3 Billion $CAD.

The above should be reviewed, as my method may not be correct. This also does not represent the entire country, just one exchange. --LadyGeek 13:37, 14 January 2016 (MST)

Thank you that good enough and it's been re-worked and integrated into the article. I found one other reference, THRESHOLDS | Canadian Investment Funds Standards Committee(CIFSC) that I've also integrated, although I had trouble interpreting and therefore left it as an exercise for the reader. --Peculiar Investor 16:02, 14 January 2016 (MST)

Apparently the midcap index is now the completion index (according to S&P; see my edits to the article). The bottom of the completion index (and therefore the Composite) is $385M. Logically, anything smaller is 'small cap'. Except that the 'Small cap' index starts at 2.0 billion, so there must be a lot of overlap between the Completion index and the Small cap index (although I have not checked the constituents). Because the CIFSC threshold is about 4 billion, I interpret it as the generous upper limit of a combined small-mid category. I do not think that CIFSC has a proper limit between mid and small--Quebec 17:25, 14 January 2016 (MST)

This was bugging me. I think that I've figured it out. There are no rigid cutoff values in the S&P indexes. Instead they use partly overlapping market cap ranges. This could be to avoid too much turnover in the index compositions. See File:Market-cap-Canada-US.jpg, now used in Market capitalization.--Quebec 06:12, 16 January 2016 (MST)

DELETED TEXT JANUARY 16, 2016: Canadian cutoffs As stated above, different numbers are used by different indexes and there is no official definition of, or full consensus agreement about, the exact cutoff values. The Toronto Stock Exchange has three market capitalization based indices of note.

• S&P/TSX 60 Index - An index of large, liquid, Canadian issuers listed on Toronto Stock Exchange. It is market capitalization weighted, with weights adjusted for available share float, and includes securities of 60 issuers balanced across ten economic sectors. The largest market cap is 110 billion dollars and it's lowest capitalization is 2.4 billion as of December 31, 2015.
• The S&P/TSX Completion Index is comprised of the constituents of the S&P/TSX Composite Index that are not included in the S&P/TSX 60 Index. The index was formally the S&P/TSX MidCap Index. The smallest company in the index has market cap of $385M as of December 31, 2015, which of coarse is also the minimum market cap in the Composite index.
• The S&P/TSX SmallCap Index provides an investable index for the Canadian small cap market. It's highest capitalization is 2.0 billion and it's lowest is $78M as of December 31, 2015.

Canadian investors can use the mid- to large-cap threshold as 2.4 Billion, but the mid-small threshold could be 385 million or 2.0 Billion, depending on which index is used.

An alternative is the mutual fund category thresholds from the Canadian Investment Funds Standard Committee, which are updated quarterly.

Ready to merge into Main namespace?

I checked this against the current Investment style article and pretty much all it gets covered between the two drafts we've been working. Following up on LadyGeek's comment in the parallel draft article, is this article complete enough to move into the Main namespace? I'd say very close, if not yes. For this article I'll need to merge rather than move so that the edit history is maintained. --Peculiar Investor 16:10, 14 January 2016 (MST)

Yes, go ahead and merge. We can sort out the market cap issues and other details later.--Quebec 17:37, 14 January 2016 (MST)

Done --Peculiar Investor 07:53, 15 January 2016 (MST)