Blog 1

In this week’s lectures, the Portfolio Theory and the Capital Asset Pricing Model have been discussed. Having studied business and economics during my A Levels a few years back, I know a little bit about the Portfolio Theory which is about diversification of investments to reduce risk. The lecture sort of refreshed my memory as to what the Portfolio Theory is and the lecturer also showed us an example on how to calculate the risk and expected returns on current investments and new opportunity. For me, that was the most interesting part of the lecture as there was a little bit of math involved and math used to be my favourite subject back in high school. Unfortunately, we have no examinations in this module so there is no chance of practising my math. During the lecture, my mind constantly thought of my future plans of investing as this was one of my reasons to study finance in the first place; which is to expand my knowledge of investing. The lecturer also talked about how to apply the Portfolio Theory into the Capital Asset Pricing Model and some of the best combinations of investments for a portfolio on the capital market line. Having learned this and absorbing all the things that was said during the lecture, I will definitely keep this in mind in the future when I have the money to invest. This knowledge could be useful in the future as I would like to be a full time investor someday. There are also many other theories other than the Portfolio Theory and I will look them up when I am free to further enhance my knowledge on this area.