would you ever use CAPM to make personal investment decisions? If so when? If not, why?

Yes. I use CAPM to get a general idea of my investment decisions.

http://www.investopedia.com/terms/c/capm.asp

To determine whether I would use the Capital Asset Pricing Model (CAPM) for personal investment decisions, I need to consider the following factors:

1. Understanding the CAPM: The first step is to understand what the CAPM is and how it works. The CAPM is a financial model that helps estimate the expected return on an investment by taking into account the risk-free rate of return, the expected market return, and the investment's beta, which measures its sensitivity to market movements.

2. Availability of Information: The CAPM relies on accurate and up-to-date information, such as the risk-free rate and expected market return. If these inputs are readily available, it becomes easier to apply the model to personal investments.

3. Risk and Return Assessment: The CAPM helps in assessing the relationship between expected return and risk. If I am comfortable with the level of risk associated with an investment and believe that the expected return justifies that risk, then the CAPM can provide a framework for making investment decisions.

4. Applicability to Diversified Portfolios: The CAPM is most suitable for evaluating diversified investment portfolios rather than individual securities. If I have a portfolio consisting of multiple assets, the CAPM can help ascertain the required rate of return for the overall portfolio.

Considering these factors, I may choose to use the CAPM for personal investment decisions in the following situations:

- Diversified Portfolio: If I have a well-diversified investment portfolio and need to evaluate the overall risk and return profile, the CAPM can be a valuable tool.

- Long-Term Investment Horizons: The CAPM is based on the assumption that investors have a long-term investment horizon. If I am looking to invest for the long term and have the required inputs for the CAPM, it can provide a useful estimate of expected return.

On the other hand, I may not use the CAPM for personal investment decisions in the following scenarios:

- Lack of Required Inputs: If I do not have access to reliable data on the risk-free rate, expected market return, or company-specific beta, applying the CAPM may not be feasible.

- Limited Diversification: If my investment portfolio consists of only a few individual securities, rather than a diversified portfolio, the CAPM may not be as relevant.

- Alternative Investment Techniques: There are other investment analysis techniques, such as fundamental analysis or technical analysis, which may better suit my investment approach and style.

In summary, the decision to use the CAPM for personal investment decisions depends on factors such as the availability of required inputs, the nature of the investment portfolio, and the suitability of the CAPM to my investment approach and goals.