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You always hear that you should maintain a diversified portfolio. You always hear that you should maintain a balance of stocks and bonds, foreign and domestic securities, safe and aggressive investments. If you’re not a well-seasoned investor, you may have the very best intentions of building such a diversified portfolio but just not know what target you should be aiming for.
What percentage of your portfolio should be allocated to stocks and bonds will largely be a factor of your age and, to a lesser extent, your risk tolerance (a portion should be allocated to cash as well but for simplicity’s sake, we’ll just stick to stocks and bonds). The theory goes that the younger you are the more aggressive you’re able to be with you’re investing because you’ll have more time to recover from the periodic highs and lows of the market.
So what type of allocation should you have? A very basic investing principle says that you should subtract your age from 100 and that number will be the percent of your portfolio that should be allocated to stocks. It’s a good guideline but you should also consider your willingness to stomach risk in the equation as well. Someone who is 20 years old but absolutely can’t stand seeing any fluctuation in the value of their investments probably shouldn’t have 80% of their portfolio in stocks. Likewise, it’s not all that unusual for someone in their 20s or 30s who’s comfortable with risk to have 100% of their portfolio in stocks.
There are a few more guidelines to keep in mind as well. First, no matter what you’re age you should probably always have at least a small percentage (20-30%) of your portfolio in stocks to help stay ahead of inflation. An all-cash portfolio simply won’t provide enough of a return to keep pace with inflation. Second, keep enough cash in your portfolio to handle any short term needs/purchases you have planned like a house down payment, vacation or job loss.
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What is the difference between asset management and strategic asset management?
"Strategic asset management" could refer to "strategic asset allocation", i.e. long-term asset allocation - whereas "tactical asset allocation" refers to short-term investments.
Do asset allocation funds affect my retirement plans?
Asset allocation funds should be available to everyone.Most brokers have this program. Asset allocation funds will not only minimize the risk but also optimize your return.
Asset Allocation?
Asset Allocation The asset allocation is designed to help you create a balanced portfolio of investments. Your age, ability to tolerate risk and several other factors are used to calculate a desirable mix of stocks, bonds and cash. The calculated asset allocation is a great place to start your analysis in building a balanced portfolio. Click on the "View Report" button for a detailed look at your results.
Where can I learn about Asset Allocation, in Gainesville, FL?
There are many investors that can help you with Asset Allocation information. Looking online is also a good way to find some good information.
What has the author Ken Nyholm written?
Ken Nyholm has written: 'Strategic asset allocation in fixed-income markets' -- subject(s): Mathematical models, Asset allocation, Asset-liability management, OverDrive, Business, Finance, Nonfiction
Where do I find a beginners guide to Asset Allocation Models?
An overview of Asset Allocation models can be found on the SEC Gov or Money By The Book websites. It is also discussed on the Beginners Invest site as well as other websites that deal with asset financing.
How do you make personal investment?
First, consider your risk tolerance, time period nad expected return; Second, do your asset allocation with a sufficient diversification; Third, manage your portfolio and rebalance the asset allocation.
How do you deal with asset allocation by age?
If a person getting an asset allocation by age inheritance is looking at what to do with it, the most obvious thing would be to put in in the bank and let it roll over until the person is ready to retire.
What is meant by the term asset allocation mutual funds?
Asset allocation mutual funds are funds in which a portion of the funds are dedicated to specific stocks or bonds. With that in mind, the controller of the mutual fund ensures that funds are proportioned correctly.
What is depreciation and why is it included in the balance sheet?
Depreciation is allocation of fixed asset cost to income statement of useful life of asset that's why shown as reduction in fixed asset value.
Is depriciation a fixed cost?
Yes depreciation is a fixed cost of business which is an allocation of fixed asset cost over period of asset life.
What is a proactive strategy designed to direct resources to known crime areas?
Asset Allocation.
