Asset Allocation

Asset allocation may be the investment equivalent of flossing your teeth, most people know they should do it, but somehow they just don't get around to it. What Exactly Is Asset Allocation? In many ways asset...
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Knowing how to build a diversified portfolio can seem overwhelming. Two words that seem to go hand in hand when investing are risk and return. Asset allocation can be an investor's primary tool for managing overall...
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Regardless of how smoothly they operate, all individuals, organizations, industries, and economies routinely experience setbacks, ranging from minor inconveniences to major catastrophes. Even the most closely managed...
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Investing, by its nature, is the goal of taking something and creating an environment in which it will grow. If done properly it will grow on a continual basis and the amount of growth received will reflect the amount of...
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When asked how their assets are diversified, most people respond by indicating how much of their portfolio is divided between stocks, bonds, and cash. But looking at your overall financial diversification means more than...
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We all know we should rebalance our portfolios periodically to ensure they stay in line with our targeted asset allocation. Why, then, is it so difficult for us to do this? The primary reason is that rebalancing goes against...
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Periodically, you should thoroughly review your portfolio to ensure it is still helping you work toward your investment goals. Follow these steps during that review: Review your current portfolio mix. List the current...
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With an asset allocation strategy, you can't just allocate assets in your portfolio once and then forget about your portfolio. Over time, your actual asset allocation will stray from your desired allocation because different...
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The past few years have taught investors the meaning of volatility in investing. While investors weren't that concerned about volatility before 2000, when it worked to their advantage, the negative volatility of the past few...
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Within the investment consulting community, it has long been preached that periodically rebalancing a multi-asset class portfolio is a requirement for an effective investment policy. However, little research is available to...
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Now we'll discuss how rebalancing also keeps your portfolio in line with your target allocation (which should be based upon your risk tolerance and goals). Consider the case of two investors, Bruce and Mike, who owned the...
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Rebalancing - using new cash or shifting money to bring your investment portfolio's target allocations back in line annually - is one of the simplest and soundest investment strategies around. This, of course, supposes that...
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The only two things that were ever considered to be absolutes in life were death and taxes. I would suggest that we add two other items to that list; the predictions for the coming year in January of every year followed by...
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You're almost certainly familiar with diversification, but it is also one of the most misunderstood investment concepts. Diversification is one of the most commonly discussed topics among all types of investors from those...
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When asked by a waitress whether he would like his pizza cut into six or eight slices, Yogi Berra is reputed to have said, "Six. I'm not hungry enough to eat eight slices of pizza." How you slice the pie is the key to...
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Today let's discuss why asset allocation, a basic but often misunderstood aspect of investing, is important. When you invest, you must have accumulated assets (like cash, but sometimes also stocks, options, real estate,...
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When it come to investing, are you a micromanager? Or a hands-off type? Micromanagers obsess over their portfolios. They switch in and out of investments with every tic and tremor on Wall Street or in the economy. Hands-off...
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In the construction of your portfolio, asset allocation, investment selection, cost containment, and tax efficiency may be the most important decisions that you face. Each of these decisions affects the performance...
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Global stock markets have had to digest a full plate of unsettling events this summer - everything from the North Korean missile tests and the renewed conflict in the Middle East to a new terrorist plot to bomb aircraft....
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You've heard the old investment adage, "Don't put all your eggs in one basket." It's good advice. A diversified portfolio should be at the core of any well-planned investment strategy. While a worthy goal at any age, it's...
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Just as a healthy "balanced" diet promotes good health for your body, a balanced portfolio promotes healthy investment returns. In matter of fact, balancing your portfolio is infinitely more important than WHICH stocks you...
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The theory behind asset allocation is to spread your investments across different asset classes to help protect your portfolio from downturns in any one asset. Since different investments are affected differently by economic...
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Diversification is a tool used by financial professionals to help investors create a portfolio focused on achieving their goals and dreams, without exposing them to undue risk. Diversification assists in creating...
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When traveling to unfamiliar territory most people will take along with them roadmaps (the more technical among us might even use a global positioning system). When navigating through the investment world maze, having an...
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For many investors, investing typically begins with one stock or mutual fund. Over time, other selections are added because many people understand it may not be prudent to invest everything in a single security, even if it...
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