Company: Financial Engines
Credo: Count risks.
Award. In 1990 he got the Nobel Prize on economy for a contribution to the theory of pricing of financial assets. He divided an award with Harry Markowitz and Merton Miller.
Quote: "At some investments the expected profitability is higher, than at others. They will appear in the most deplorable state in the worst times".
Principles. His scientific activity proves interrelation between risks and the expected profitability. The well-known coefficient of Sharp shows effective management of an investment portfolio.
Invest like Sharp. Choose the expected profitability depending on the attitude towards risk by means of the probabilistic Monte-Carlo method. If for this purpose your knowledge of mathematics isn't enough, use the simple Vanguard (vanguard.com/nesteggcalculator) calculator to estimate options of investments, and be put in diversified index funds and exchange investment funds (ETF) with the low commissions.
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