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Frequently Asked Questions1. About Tara Advisors Co. and TPSTM
2. Creating a Portfolio with TPS InvestorTM
4. The Market, Risk, and Modern Portfolio Theory (MPT)
5. Technical Support
Who is Tara Advisors Co.?
Tara Advisors Co. is the operating brand for Tara Consulting Group, Inc., a software development firm founded in 1988 in the State of California. Tara Advisors Co. is headquartered in Seal Beach, California. Tara Advisors Co. also has a South Korean subsidiary, Tara Korea, which was formed in January 2001. Tara Korea is based in Seoul, South Korea.
What is the main objective of Tara Advisors Co.?
The main goal of Tara Advisors Co. is to become the leading software provider and marketer of investment tools and services. We believe that academic theories in finance have direct relevance to real-world investing, and that these, when appropriately applied, can bring significant benefits to investors of all experience levels.
Why should I trust Tara Advisors Co.?
Tara provides independent, impartial investment information and advice. Tara is not in the business of selling stocks, mutual funds or other investments, and does not receive any compensation from the allocations of specific stocks and funds recommended.
Why do I need investment advice?
Have you thought about how much money you'll need when you retire? Or how much money you'll need to make your dreams come true? Maybe you're planning to buy a home or send your children to college. Chances are that you've thought about it but don't have a clear action plan. Are you hoping that your savings or Social Security benefits can support you in retirement? Only one person in eight has even saved $100,000 by the time they retire. Retirement and event planning are important, yet you may be uncertain about the best ways to save and invest. Tara Advisors Co. is here to help you understand where you are now, where you want to go, and how to get there.
What is TPSTM
TPSTM is a revolutionary online portfolio analysis and management solution based on Modern Portfolio Theory (MPT). TPS's main objective is to help investors of all experience levels make better investment decisions. Tara Advisors Co. offers three powerful and user-friendly TPSTM solution sets: InvestorTM, AdvisorTM and InstitutionalTM.
How is Tara Advisors Co. different from online portfolio monitoring and brokerage companies?
Tara Advisors Co. is a registered investment advisor both in the State of California and at the federal level. Tara is not a brokerage house and does not intend to suggest specific securities. An investor's choice of particular securities is based on his or own preferences. Tara will optimally allocate among these given securities.
Does Tara offer trade execution on its website?
Tara does not offer trade execution at this time. We are focused on delivering the highest-quality portfolio analysis and financial planning software. We encourage you to make use of our tools to build investment scenarios, to manage risk, and to maximize your returns. You may use one of our multiple reporting features to consolidate the results of your analysis before carrying out your trades with a broker.
What is unique about the TPSTM family of products?
TPSTM is much more than a portfolio tracker. In addition to enabling an InvestorTM to track a portfolio's performance, TPSTM has the ability to guide an Investor's decision-making at every stage in the investment process. TPS's analytical modules are built on extensive and complex algorithmic computations. Behind those computations is a set of highly robust and extensively tested financial engines.
What are the primary features of TPSTM?
An ability to optimize an InvestorTM's current holdings of stocks and cash management accounts, an ability to formulate custom-tailored mutual funds based on individual investment styles, an ability to provide various idealized asset allocations by investment style and risk preferences by using stocks, cash and cash equivalents, an ability to formulate custom-tailored replicate portfolios, which mimic the stylized ideal market portfolio, an ability to create various umbrella funds by selecting and combining publicly traded mutual funds, which mimic the stylized ideal market portfolio, and an ability to provide various idealized sector funds and sector indexes.
How do I get started?
We suggest you first take our Guided Tour, and then read through TaraGlobal's FAQ and Glossary. Once you have familiarized yourself with the various concepts behind TPSTM, including its InvestorTM module, the most appropriate place to start is the Sign Up page. You will be guided through a simple process to build one or more portfolios. Once you have constructed a portfolio, then we will help you determine the optimal mix of assets using the TPSTM optimization engine.
How do I create a new portfolio with TPSTM? - Please refer to Guided Tour!
Can I run analysis on a portfolio without entering the number of shares for newly added assets?
You can use TPSTM optimization to determine how to optimally allocate your total investment across the assets in a current portfolio; even if one or more of those assets are assigned 0 shares in your current portfolio. To run either risk or Style Analysis on your portfolio, you must specify some number of shares for each of the assets in your current portfolio - Both portfolio risk and portfolio style are calculated using only those assets that have been assigned some number of shares.
What if I want to analyze more assets than my current level of service allows?
TPS InvestorTM allows for analysis of three portfolios with up to 25 assets each. Premium Service allow for analysis of up to 10 portfolios with up to 100 assets each. Contact us to learn more about our Premium Service. If you are interested in receiving customized service to analyze portfolios with up to 50 assets, you should contact Tara Advisors Co. at info@TaraGlobal.com.
Can I run aggregate analysis across more than one portfolio?
TPS InvestorTM allows for portfolio-level analysis, one portfolio at a time. However, TPSTM InstitutionalTM and AdvisorTM do allow for analysis across multiple portfolios and Wrap accounts. If you are interested in these types of services, please contact Tara Advisors at Sales@TaraGlobal.com.
Can I run analysis on a portfolio if the purchase dates are not correct?
Yes, for portfolio optimization. As long as a valid date, such as 1/1/2001, was entered when creating the portfolio, you can run this portfolio through portfolio optimization to determine the range of possible optimal portfolios (and associated asset weightings) given the assets in your portfolio.
Does TPS InvestorTM take into consideration dividends and distributions when calculating expected return and volatility for an asset?
It depends to what extent distribution data is available on an asset. Tara factors that data into statistical calculations such as expected return and volatility for that asset. In those cases where distribution data are not available, or is late in being released by a company, we calculate expected return using daily closing prices only. Tara does its best to present unbiased data and analysis. Because distributions are taxable at different rates depending on the individual, statistics such as expected return and volatility for each asset would actually be different for each individual Investor.
How is TPS's asset allocation different from other asset allocation tools?
TPSTM asset allocation is much more interactive, personalized, and client-tailored than the typical one-size-fits-all and completely static pie charts that most other asset allocation tools offer. Powered by highly sophisticated and extensively tested financial engines that compute asset allocation results based on the principles of Modern Portfolio Theory.
What is the purpose of the Risk Preference and Investment Horizon Questionnaires?
The Risk Preference and Investment Horizon questionnaires you complete prior to running TPS's asset allocation analysis helps to determine the acceptable level of risk you should take on when investing for a given financial goal. This factors in your investment time horizon, how much you expect to invest (both initially and over time), and your comfort level with equity investing. Based on your questionnaire responses, TPSTM determines a suitable risk profile, and recommends an asset allocation based on it.
Is my target investment wealth expressed in present or future dollars?
Your target investment wealth is expressed in present dollars, discounted for inflation.
Will I receive a reminder before my paid (or promotional) term of service expires?
No you will not receive a reminder every month. Your credit card will be charged automatically. To cancel, submit the cancellation form at least three business days prior to the month you do not wish to be billed.
What if I wish to discontinue service?
If you wish to discontinue service during the seven day trial period, you can simply submit the service cancellation form and you will not be billed. Otherwise, you must notify Tara by e-mail or by submission of the cancellation form at least 3 business days before the end of your current subscription term to ensure that you will receive the length and level of service desired.
If my service level is temporarily suspended, what happens to the portfolios I created while receiving service?
All portfolios remain in Tara's database but are inaccessible for viewing or analysis. If you choose to resume service, access to some or all of those portfolios will be restored.
Can I import a portfolio from another site to do analysis on TPSTM?
Not at the moment. However, Tara is working on a new release of its software that will allow users to import personal portfolios from Yahoo! and other financial media and brokerage sites.
How does Tara Advisors Co. safeguard sensitive user data?
Tara Advisors Co. goes to great lengths to safeguard the information provided by our users. All information the user provides is held in strict confidence and is only used for the sole purpose of servicing our clients' accounts. Tara ensures secure communication with SSL and "secure servers" and we encrypt sensitive user data (such as password, credit card number, etc.) in our database. To ensure security of external account information (login and password) entered for the purpose of importing a portfolio from another site, we do not retain that information in our database - Therefore, it is impossible for anyone to access that information through our system. For additional information please see our Privacy and Security statements.
Why does Tara Advisors Co. ask for my credit card information when there is a seven day trial period?
Tara Advisors Co. asks for your credit card information to ensure that only serious investors are accessing its high-powered services. In addition, Tara needs to verify your identity and information to secure your data and provide better service to you. Credit card information is assumed to be strictly confidential and you will not be billed if you are not pleased with the service within seven days of account creation.
What if TPSTM doesn't recognize the ticker symbol of an asset I wish to include in my portfolio?
First, make sure that you have entered the correct ticker symbol. If you have, and TPSTM does not recognize it, please send a support email requesting that the asset be added to TPS's database. TPSTM currently covers thousands of U.S. stocks, but may not cover some of the less actively traded assets. In most cases, as long as the asset has a daily trading history at least 3 months long, we can add it to the TPSTM database.
What is the criterion a stock or mutual fund must meet in order to be analyzed by TPSTM?
To be analyzed, an asset must be included in the TPSTM database, and must have a trading history of at least 60 trading days.
What types of assets does TPSTM InvestorTM cover?
At the moment, TPS InvestorTM covers most stocks from the NYSE, NASDAQ and AMEX stock exchanges. Future releases of our software will include Mutual Funds, Bonds and Derivatives.
What is style analysis?
Style analysis is a technique for evaluating a portfolio by comparing its historical return to that achieved by a set of basic investment categories called asset classes (such as cash, bonds, large-cap, and so forth).
Asset classes, such as small-cap stocks, bonds, and cash are the basic building blocks of a portfolio. Each asset class has a distinct behavior that explains much of the return it produces. By breaking a portfolio into asset classes and analyzing their behavior, we can estimate the risk and return of your portfolio.
Mutual fund style To analyze the style of a mutual fund, we compare the return of the fund to the returns of all asset classes for the same period of time. The results show which combination of asset classes best describes the fund's performance. This is the fund's style, which may be different from the fund's name or stated objective.
Your portfolio's style We derive the style of your portfolio by averaging the styles of each of your stock and in the near future, mutual fund holdings (weighted by the fraction of your portfolio invested in each stock/fund).
Can I include preferred stock in my portfolio?
Currently TPS InvestorTM doesn't support preferred stock. You can use the underlying common stock instead as an approximation, but must bear in mind that the statistics for the preferred and common stock will be different.
Can I include annuities in my portfolio?
Currently TPS InvestorTM doesn't have an asset class for annuities, which are difficult to model, as they are illiquid assets. In other words, it's not easy to compute the daily/weekly volatility and correlation for an annuity.
What if the one or more assets in my portfolio split?
If a stock within your portfolio splits, your portfolio will be automatically adjusted to reflect the new price of the asset.
Why academics say the market is efficient?
While the academic approach is to present the capital market as efficient, our experience also tells us that this is generally true. The basic theorems arising out of market efficiency are that first, the price of a security fully reflects all available information and second, the value of a whole is the sum of the value of all individual pieces. The first of these theorems essentially proposes that there is no investment asset with a positive net present value, where you can make abnormal profits, because the price of an asset is no more or less than what the asset is worth. The second of these theorems advances a mathematical relationship that the price of a final security is the sum of the prices of other component securities, which makes up the final security.
What creates inefficiencies in a theoretically efficient market?
As we all know, Investors are constantly engaged in securities research and trading to seek profits. If the market were truly efficient, no Investor should be able to find an opportunity to make any money. Unfortunately for academics, but fortunately for Investors, the market does seem to reveal a great number of inefficiencies many times a day. Every time the new information arrives in the market, it affects the risk and return structures for all securities in a different magnitude. As a consequence, the relative risk/return ratio changes among all traded securities. This causes a need to rebalance a portfolio and create a new portfolio that may indeed guarantee profits after transaction costs.
How does TPSTM assist the Investor in profiting from market inefficiencies?
TPSTM is a unique tool because it allows Investors to produce their own portfolios or mutual funds. The individual InvestorTM is able to test and profit from the unique portfolio or portfolios that he or she creates.
What is diversification and why is it important?
Diversification is an integral part of the TPS™ model. For mathematical reasons, we know that diversification does wonders. What is the best way to diversify? The TPSTM model provides the answer. A well-diversified portfolio is optimal. Obviously, an optimal portfolio constantly changes as market conditions fluctuate. Does this mean that we need to constantly rebalance our optimal portfolio? Obviously, the answer is quite clearly no. It depends on our portfolio's objectives and the expected profits from doing so.
Why should TPS's mathematical algorithm work in real-time trading?
TPSTM is a mathematical algorithm based on Modern Portfolio Theory (MPT). In 1990, the original authors received the Nobel Prize in Economic Science for their work. The theory offers credible arguments pertaining to portfolio management and finance in general, as it is based on the return-risk trade-offs of investments. Modern Portfolio Theory is one of the fundamental concepts that govern finance in academia and business today. TPSTM works in the real world, partly because its underlying theory is proven to be effective. In addition, all computations in the algorithm take into account all real world frictions such as the bid-ask spread and broker commissions. It also monitors the performance of the TPSTM portfolio on a real-time basis. When the portfolio's return reaches the user's target annual return, TPS™ will alert the investor to rebalance his or her portfolio. These processes have been automated in the system.
What is risk?
Risk is a measure of the volatility of your portfolio. The risk of the average U.S. Investor's portfolio is 1.0, so a risk value of 2.0 means that your portfolio is twice as risky on the average.
What is Monte Carlo simulation? And why is it important?
Monte Carlo simulation is a tool for scenario analysis that TPSTM uses to determine the likelihood of achieving your financial goals, given the investment portfolio(s) that you have chosen. TPSTM calculates thousands of possible values your investments might grow to be during the years leading to your goals (e.g. retirement, college education, home purchase, etc). Some economic circumstances will boost your investments, while others may diminish them. Each scenario combines various economic factors that impact the performance of your investments, such as interest rates, inflation, and domestic and international asset markets. TPSTM also includes in the analysis the correlation across these economic factors.
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What web browsers does TPSTM InvestorTM support?
TPSTM InvestorTM requires a Java-enabled browser, and supports Internet Explorer (4.0 and up) and Netscape (4.0.7 and up).
What are the required Web browser settings?
How do I set up my browser to accept cookies?
One of the most common reasons for difficulty logging into TPSTM InvestorTM is that your browser has not been set to accept cookies. TPS's system requires that the 'Accept Cookie' option be enabled on your browser. If the option is not enabled, you won't be able to log in to our system, so you need to take the following steps to re-configure your browser:
Internet Explorer (IE):
Step 1: Click on Tools Menu.Netscape:
Step 1: Click on the Edit menu
How can I enable my browser for HTTPS protocol so that I can login through the Secured Server?
Internet Explorer (IE):
Step 1. Select menu 'Tools'.Netscape:
Step 1. Select menu 'Communicator'
Will my login session remain active indefinitely?
As long as you are actively using TPS™ planning or analytical applications, your login session will remain active. However, if you let 30 minutes go by without using one of the site's dynamic applications, your login session will automatically end. This is done as a safety precaution for you, so that if you forget to log off, your data won't be unnecessarily exposed to others with access to your computer.
Can I execute trades from TPS InvestorTM?
Tara Advisors Co. does not offer trade execution at this time. We encourage you to make use of our software tools to test ideas, to manage risk, and to maximize your expected returns, given your chosen level of portfolio risk. You can use our reporting features to consolidate the results of your analysis before carrying out your trades with a broker.
How do I change my password?
To change your user password, log into TPS InvestorTM and click "Member Info" on the navigation bar. That will take you into the "Edit Account Information" page on our site, where you can make the necessary change.
How do I notify Tara Advisors of a change in email address?
To change your email address, log into TPS InvestorTM and click "Member Info" on the navigation bar. That will take you into the "Edit Account Information" page on our site, where you can make the necessary change.
I forgot my password, user ID, or security phrase. What should I do?
If you forgot your user ID, you can identify yourself by providing some information that you gave us when you first signed up. Please start by entering your last name and the e-mail address that you provided to us when you first signed up, and then click Continue. If you need help, email support@TaraGlobal.com.
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