Frequently Asked Questions
Is there a detailed description of the finance theory supporting BearNBull?
Our portfolio analysis is based on two important financial theories. Modern Portfolio Theory (MPT), which was introduced by economist Harry Markowitz. And the Capital Asset Pricing Model (CAPM), introduced independently by Jack Treynor, William Sharpe, John Lintner and Jan Mossin. In 1990, Harry Markowitz and William Sharpe received the Nobel Prize in Economics for their insights on MPT and the CAPM respectively. Merton Miller, another American economist, also receive the award in 1990, but for his work on capital structure, co-authored with Franco Modigliani (Modigliani-Miller Theorem).
If your are not familiar with MPT and the CAPM, we published this short article about key insights of these theories: Demystifying Modern Portfolio Theory. For more in depth content, please check out our Finance Theory video series. There is also plenty information available online about these works, including the original essays published. Both theories are still widely used today by institutional investors worldwide.
What is the main purpose of BearNBull?
The application helps self-directed investors understand portfolio risk and return, as well as optimize asset allocation. Diversification is more than just “putting your eggs in different baskets”, the percentage allocated to each asset in the portfolio has a large effect on the portfolio efficiency. And diversification in relation to the overall market is also important. There are many trading tools available for self-directed investors, but only a few cumbersome applications for portfolio optimization. Most people end up using spreadsheets, which quickly become too complex to use. Institutional investors have had plenty of access, but they pay a high price for the software. BearNBull’s purpose is to bridge that gap, giving self-directed investors a simple and powerful portfolio analysis application.
Who is the application designed for?
We designed BearNBull for self-directed investors. But anyone interested in learning more about their portfolios is welcome to use the application.
Do I have to pay for the application?
Most features are available for free. We also want to make BearNBull a sustainable business and continue improving our services. If you find value in our application, please considering subscribing to one of our paid plans, as they help us to keep developing and maintaining the software. The Premium and Professional Plans have great additional features. Make sure you check them out!
Should I use the application to make my financial decisions?
BearNBull is not a financial advisor. It is a software application, helping investors understand portfolio risk and return. We are confident that with more investment knowledge, come better portfolio decisions. But ultimately, investors are responsible for their own choices. They can consider all the information available, but should be aware of potential limitations and biases, before making financial decisions. Finance theory is constantly evolving and there are many unanswered questions. We published a Finance Theory video series, talking about some of these important issues. As a self-directed investor, we encourage you to make your own judgement on the quality of the information you use to make investment decisions.
What are the benefits of BearNBull’s social features?
In addition to providing a simple and powerful portfolio analysis application, BearNBull also has great social features. An approach that has helped us fulfill our educational purpose. Basically, our portfolio analysis is an active learning tool, where the simulations help investors better understand portfolio risk and return. The social component creates a collaborative learning environment, where you can exchange investment ideas with other investors and learn from these interactions.
What are the next features on the roadmap?
Looking forward, we continue to pursuit our mission to build a simple and powerful portfolio analysis application for self-directed investors. As BearNBull grows, we envision the application helping our users with three key steps of the investment lifecycle:
1- Choosing the best assets
2 - Allocating assets efficiently
3 - Tracking portfolio performance
We have a great roadmap of features, which we are currently working on. User feedback guides our improvements. Most of our recent updates came from your insights! So remember to reach out with your comments and requests. Just send us a note at firstname.lastname@example.org .
Where does the financial data come from? And when is the information updated?
We get our raw data from Financial Modeling Prep, which aggregates data from several financial data providers in the market. The key information we receive from them are the adjusted closing prices for public assets. The prices are adjusted based on dividend distributions and asset splits/mergers. Following the guidelines of the financial theories that support our portfolio analysis, BearNBull’s algorithm calculates all of the assets and portfolio risk/return metrics.
The amount of historic data used in the calculations can be adjusted on the portfolio page by the user. Just set the timeframe using the Start Date and End Date fields below the asset table on the portfolio page. This flexibility is great for running a sensitivity analysis, comparing metrics of the same assets or portfolio in different timeframes (Pro Tip: Use snapshots to display them on the same graph!).
We use weekly data for periods from six months to three years. And monthly data for periods from three to ten years. We currently don’t support analysis with less than six months or more than ten years of data. The weekly data is updated every Saturday, with data from the current week. The closing price on Friday is the data point used, so if you want to use the most up to date weekly information, use the most recent Friday as the portfolio End Date. Monthly data is updated on the 1st day of the month, with the closing information from the previous month. The closing price of the last day of the month is the data point used, so make it the portfolio End Date to get the most up to date monthly data.
Which assets are supported?
We currently support US stocks and exchange-traded funds (ETFs). We plan to add support for more assets, such as mutual funds, international and alternative assets in the future. If you have a specific request, please send us a note at email@example.com .
How can I add a cash asset to my portfolio?
We currently do not provide a specific cash asset. Most investors will have their cash balances on short-term government bonds, savings or money market accounts, which yield varying returns at a close to zero risk. On BearNBull, a good proxy to use for your cash balance is a short-term treasury ETF, such as the iShares Short Treasury Bond (SHV). It basically has zero risk and a small expected return, probably close to the return on your cash accounts.
I can’t add a specific asset to the portfolio, what should I do?
We currently support US stocks and exchange-traded funds (ETFs). Make sure the asset you are trying to add is currently supported. Also check if the Start Date and End Date of the portfolio are within the lifespan of the asset. Some assets are new listings and only have a few years or months of data available. If you are still unable to resolve the problem, please request our support through the form below.