Zero-Investment Portfolio
What Is a Zero-Investment Portfolio? A zero-investment portfolio may be a collection of investments that features a net value of zero when the portfolio is assembled and thus requires an investor to require no equity stake within the portfolio. as an example, an investor may short sell $1,000 worth of stocks in one set of companies, and use the proceeds to get $1,000 available in another set of companies. Understanding a Zero-Investment Portfolio A zero-investment portfolio that needs no equity whatsoever is only theoretical; it doesn’t exist within the world, but conceptually this sort of portfolio is of interest to academics studying finance. a very zero-cost investment strategy isn't achievable for several reasons. First, when an investor borrows stock from a broker to sell the stock and take advantage of its decline, they need to use much of the proceeds as collateral for the loan. Second, in the U.S., a short sale is regulated by the Securities and Exchange Co...