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asset allocation

Portfolio Rebalancing – Keep Your Asset Goals In Line

Published or updated September 3, 2011 by Glen Craig

Balance
Balance
Are Your Investments In Balance?

Investors construct their portfolios based on investment goals and risk tolerance by assigning appropriate weights to different asset classes and categories (or how much dough should go to each class). Over time, as market conditions change, investment performances among asset classes change but not in the same amount at the same time.  Some assets may grow faster and become over weighted, while others fall behind and become under weighted.  As a result, the risk profile of the portfolio is altered (you have too much invested in certain classes).  Without proper adjustment, the current portfolio would have a higher or lower risk depending on the relative values of over weighted assets and under weighted assets.  Portfolio rebalancing brings a portfolio’s current asset allocation back to the original mix so that investments can be realigned to initial investment goals to maintain an appropriate risk level.
[Read more…] about Portfolio Rebalancing – Keep Your Asset Goals In Line

Filed Under: Investing Tagged With: asset allocation, diversification, portfolio rebalancing

What is Asset Allocation?

Published or updated May 23, 2013 by Glen Craig

Different buckets for asset allocation

What is Asset Allocation?

Different buckets for asset allocation
Different buckets for asset allocation

Asset allocation is an investment strategy that is used to choose among various asset classes such as stocks, bonds, commodities, foreign currencies, real estate, annuities and life insurance, and high value collectibles including precious metals.

Asset allocation as a way of investing is an important part of a person’s financial planning process that primarily concerns the very relationship of an investment portfolio’s risk and return.  Different asset classes offer different risks and returns as long as their performances are not perfectly correlated (if they go up and down in the same market conditions).  Asset allocation reduces the volatility of investment results when not all investments in the portfolio rise and fall at the same time.

How is Asset Allocation Related to Investing?

[Read more…] about What is Asset Allocation?

Filed Under: Investing Tagged With: asset allocation, bonds, Stocks

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Glen CraigI'm Glen Craig - I used to live paycheck-to-paycheck, drowning in credit card debt. I turned that all around and now I build wealth rather than debt.

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