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Thursday, June 10,2010

Buff Briefs | Rebalance investments

boulderweekly.com/briefs

Prof: Rebalance investments

When it comes to investing money in the stock market, actively rebalancing your portfolio is so critical that it can help turn individual investment losers into winners, according to University of Colorado at Boulder Professor Michael Stutzer.

In a recent paper, he showed that using a rebalancing investment strategy could resolve a “Parrondo Paradox,” a phenomenon in game theory in which “given two games, each with a higher probability of losing than winning, it is possible to construct a winning strategy by playing the games alternately.”

In the paper, titled “The Paradox of Diversification,” Stutzer demonstrated a scenario in which two investments were each more likely to lose real income than to earn it. However, creating an equally weighted portfolio of the two, maintained by rebalancing, was surprisingly more likely to earn real income than to lose it.

Many investors initially create balanced portfolios but then fail to reallocate their funds to keep them balanced.

For example, suppose an investor puts 60 percent of his or her money in a diversified stock fund and 40 percent in a bond fund. If the stock market goes up by 20 percent next year, but bonds stay even, the investor’s portfolio is no longer balanced, Stutzer said. To rebalance the portfolio, the investor would have to sell some of the stock fund, moving that money over into the bond fund to achieve the initial 60-40 mix.

New alumni association director

Deborah Fowlkes has been named executive director of the University of Colorado Alumni Association. Fowlkes, who will assume the post on July 26, currently serves as assistant vice president for alumni relations and executive director of the Temple University Alumni Association in Philadelphia.

Fowlkes grew up in Boulder. She is a graduate of Boulder High School and the daughter of retired CU mathematics professor Irving Weiss.

Prior to her position at Temple University, Fowlkes worked for almost two decades at Duke University, where she served as director of alumni education and travel, director of alumni continuing education and assistant director for alumni admissions.

She holds a bachelor’s degree in comparative literature and French literature and a master’s degree in liberal studies from Duke.

The post is currently held on an interim basis by Ron Stump, who formerly served as CU-Boulder’s vice chancellor for student affairs.

CU names new Wardenburg chief

The University of Colorado at Boulder has named Donald Misch as assistant vice chancellor for health and wellness and director of the Wardenburg Health Center, effective July 1. Misch serves as executive director of Northwestern University Health Service in Evanston, Ill., a post he has held since 2003.

Gary Chadwick, who is retiring July 1, is the current Wardenburg director and assistant vice chancellor for health and wellness.

Misch also will direct campus activities concerning alcohol and other drugs and will be the liaison for the campus and to the city on those issues. He will also chair the new CU Impact Coalition, a task force that examines student wellness, health promotion and alcohol and other drug issues on campus.

In addition, Misch will directly oversee the departments of Counseling and Psychological Services, the Student Recreation Center and the Office of Victim Assistance. He will be responsible for a $20 million budget, 200 professional and classified staff and approximately 300 student staff.

Prof lands national honor

Kris Gutiérrez, a professor in the School of Education at the University of Colorado at Boulder, has been named to the National Academy of Education (NAEd). The academy elects members annually based on outstanding scholarship or contributions to education. This year, NAEd elected only 10 new members.

Gutiérrez, the first person to hold the Provost’s Chair at CU, is known for her groundbreaking research in language, literacy and human development. She joined CU last year. She was formerly a professor of social research methodology in the Graduate School of Education & Information Studies at the University of California, Los Angeles.

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