My first test with the ETF

International equity investing and valuation is becuase of accounting differences and language bariers is difficult. But emerging markets are growth drivers of the world. I tough it could be a good idea to buy an emerging market index. I can remember from my studies that Exchange Traded Founds are optimal for this purpose. I read somewhere that management cost of the iShares are not much so I added iShares China 25 to my porfolio. The above image shows the performance of the index in one month. I think index funds are good for beginners who does not know anything about valuation etc... but can analyze the general trends.

My first invesment porfolio test

I was waiting for my friend in a bookshop. I picked up a book Which is called "the little book of investing" or something. Which explains the basics of investing. I found out in the book that there are sometools which are called stock screeners. I search in internet and found out such tools. I made a ranking and picked the top stocks in my list. I then used finance.google.com web site to test my strategy. I created a porfolio there and started to watch the developments for 1 month.

I used different methods when constructing this porfolio. I first used Moder Porfolio Theory and historical prices (instead of expected prices) to build the porfolio allocation.

I found out later that my return would be higher if I would allocate the porfolio based on the market capitalization instead of the MPT allocation. So I though that I need to do anything here to find out more about the porfolio allocation strategies.