Birmingham residents rank among nation’s savviest investors

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When it comes to making investments, Birmingham residents are among the nation’s most savvy. That’s according to New York City financial technology company, SmartAsset and its review of investment for various cities across the country.

Alabama InvestmentsIts list of “Places with the Savviest Investors” ranks the Birmingham region No. 1 in state and No. 17 nationally out of 129 cities included in the study.

Here is a look at how Birmingham performed in each category of the study:

  • Annual Return: -5.7%
  • Volatility: 24.8%
  • Post Tax Return: -5.7%
  • Savviest Investors Index: 84.52

SmartAsset analysts endeavored to find where people are not only seeing good returns on their investments but where they are doing so without taking too much risk. The report examined annual investment returns, as well as portfolio volatility and post-tax returns.

In order to find the places with the savviest investors SmartAsset calculated investment returns and portfolio volatility over the last year, focusing on data of user portfolios provided by our partner Openfolio. They then calculated the risk-adjusted return of the stocks using the Sharpe Ratio, which is the stock return minus the risk-free rate divided by volatility.

After that they indexed and ranked each of the locations based on this risk-adjusted return to find the places where people were seeing the best returns for the least risk. And finally the company calculated the amount of money investors were taking home after paying both federal and state capital gains taxes.

The report found the savviest investors in Reston, Va., followed by Renton, Wash., and White Plains, N.Y.


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