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When you sit down with a financial professional to talk about investments, one of the first terms you may hear when discussing your portfolio is 'asset allocation'. To take some of the mystical feel away from the term, let's define it in plain words. All asset allocation really means is the breakdown of how much of your total investment portfolio is placed in certain individual asset classes or types of investments.
The conversation is sure to be accompanied by visual aids. The most common graphical representation of asset allocation models is the pie chart. It shows how much of your investment pie is made up of each particular asset class, usually showing a percentage number for each slice of pie. Watch for it and you'll see it.
When you start making decisions about portfolio construction, the first fork in the road usually is how much will you allocate to equity investments versus fixed-income investments. If that sounds Greek to you, relax; it's finance-speak for stocks vs. bonds. (Or it used to be that simple. Truth is, today the investment world is filled with unique assets, all different in the way they're constructed and the way they behave. The basic distinction is still there, however.) Equity investments are those that represent an ownership interest in some underlying thing of value, usually shares of a publicly traded corporation, or a mutual fund that invests in such. Fixed-income assets in turn do not represent an interest in any underlying asset. Instead, when you buy a fixed-income asset, such as a corporate bond you're essentially lending your money to the issuer. In exchange the issuer pays you interest over the life of the bond and you get your principal back at the end of the term.
So here's where the pie charts come out and you'll hear professionals talking about '80-20' or '70-30' allocations. Generally that means you've got, or they are recommending, 80% or 70% go to equity investments and 20% or 30% to fixed-income assets, respectively.
Many different factors go into the asset allocation decision such as your age, what the intended purposes of the investments are, risk tolerance, and your overall tax situation. Don't take this discussion lightly. Investment research has shown that asset allocation is one of the biggest drivers of investment returns.
What else can I help you with?
What is another name for a circle graph?
Circle graphs are also called pie graphs or pie charts because of the obvious round shape. Circle graphs show percentages by the percent-matching division in the circle. The division of this chart is similar to the cutting of a pie, again, going back to the factor of a pie chart/graph.
What is A chart that shows the relationship of each part to a whole?
A chart that shows the relationship of each part to a whole is called a pie chart. It displays data in a circular format, where each slice represents a proportion of the total, allowing for easy comparison of different categories. Pie charts are useful for visualizing relative sizes and percentages, making it easier to understand how individual components contribute to the overall total.
What is meant by piechart?
pie chart is known as circle graph which shows a table of contents in same proportion or percentage on the chart. it is statistical graph shows a shape of pie which cut in slices. pie chart is not successfully used because it shows a single result.
What is the type of graph expressed in a circle?
pie graph
What type of graph expressed in a circle?
A pie chart is a graph that is expressed in a circle form. It usually shows your data sectioned off like pieces of a pie and colored differently.
How is silk making spread?
pie! pie!
What does it take to make pie?
It depends on the type of pie you're making
What company is top seller of pie crust?
If you are making pie, do pillsbury
What does the US budget breakdown pie chart reveal about the allocation of funds in the government's financial planning?
The US budget breakdown pie chart shows how the government allocates its funds across different categories. It reveals the priorities and areas where the government spends the most money, such as defense, healthcare, education, and social programs. This helps to understand where taxpayer money is being used and the government's financial planning priorities.
Why did Kanye West dicied to rap?
Originally Kanye was making beats for Jay Z's rap albums and he seen the money that Jay Z was making off of his beats and he wanted to get a piece of the pie.
How much money does a gunsmith make an hour?
pie pie and 3,000,000,000,000,000,342 dollars an hour
What does the current government spending pie chart reveal about the allocation of funds in the budget?
The current government spending pie chart shows how funds are allocated in the budget. It reveals the percentage of money that goes towards different areas such as healthcare, education, defense, and social programs. This helps to understand where the government is prioritizing its spending and where there may be potential areas for adjustment or reallocation.
Can a pie chart be used to help budget your bills or anything pertaining to budgeting money?
Yes, eg a pie chart of how your money will be allocated
How much money did American Pie gross worldwide?
American Pie grossed $234,723,148 worldwide.
Who invented the shoe making machine that increases the speed of shoe making?
pie.
When is it necessary to prebake a pie crust?
You will use a pre-baked pie crust when you are making a cream pie, when filling the pie crust with fresh fruit, or anything that does not require baking.
Do you have to peel apples before making apple pie?
No, you do not have to peel apples before making apple pie, but it is a common practice to do so for a smoother texture in the filling.
