Introduction
AF3316 Investments
Shaojun Zhang, Ph.D. ASA
About myself
Name: Shaojun ZHANG 張少軍
Education:
– BSc, Tsinghua University, China, 1996
– BEng, Tsinghua University, China, 1996
– MSc, Florida State University, U.S.A., 1998
– Ph.D., Florida State University, U.S.A., 2001
Professional Qualification:
– Associate of the Society of Actuaries (ASA), since 09/2008
Academic Employment:
– Asst/Associate Prof, Hong Kong PolyU, since 01/2009
– Asst Prof, Nanyang Tech. Uni., Singapore, 06/2001 ~12/2008
– Part Time Lecturer, Florida State U., USA, 08/1996 ~ 05/2001
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What does history tell us?
World Equity World Bond
Average annual return (%)
1926-2020
9.46
1926-1955
10.40
1956-1985
8.97
1986-2020
9.07
T-bills
Inflation
5.99
2.85
6.22
8.49
3.34
1.10
5.84
3.11
2.94
1.51
4.85
2.53
Cumulative wealth ($)
1926-2020
1926-1955
1956-1985
1986-2020
Standard Deviation
1425.80
10.98
9.71
13.38
181.94
2.12
5.64
15.18
21.67
1.38
5.41
2.89
14.65
1.50
4.08
2.39
1926-2020
1926-1955
1956-1985
1986-2020
17.74
21.46
15.36
15.98
8.94
8.17
8.15
8.93
3.09
1.22
3.19
2.52
3.97
5.55
3.50
1.25
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Equity Investment Creates Wealth
Cumulative wealth from 1926 to 2020
1600.000
1400.000
1200.000
1000.000
Dollars
World Equity Return
World Bond Return
800.000
T-bills
Inflation
600.000
400.000
200.000
0.000
Year
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Bond Investment Preserves Wealth
Cumulative wealth from 1926 to 2020
200.000
180.000
160.000
140.000
120.000
Dollars
World Bond Return
100.000
T-bills
Inflation
80.000
60.000
40.000
20.000
0.000
Year
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Equity is Riskier than Bond
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Figure 6.2 Portfolio Risk as a
Function of Number of Securities
Over the period
2010-2014
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Warren Buffett has said
"Investing is not a game where the guy with
the 160 IQ beats the guy with 130 IQ...
What's needed is a sound intellectual
framework for making decisions and the
ability to keep emotions from corroding that
framework."
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Where do you want
to be?
Learning Curve
Where are you
standing?
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Welcome to
AF3316 Investments !
Feel free to contact me
Dr Shaojun Zhang
shaojun.zhang@polyu.edu.hk
Office: M505c
Tel: 34003458
Office hours: 4:30pm-6:30pm
Monday and Thursday
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