Investment managers use many different assets to construct portfolios. One of the top tools for mitigating risk is good old-fashioned cash. However, cash does not always have to be in US Dollars. Investors can store their hard-earned savings in other currencies, too. But currency values fluctuate;...ETFs and Mutual Funds in Asset Allocation
Building a properly allocated portfolio requires the right tools. The first step is to understand the tools of the trade in asset allocation. Professional investment managers often use diversified pools of securities as one of these tools. While there are different kinds of pooled investments,...Asset Allocation: The Great Balancing Act
Last week we explored the first part of asset allocation in Asset Allocation: Tools of the Trade. We reviewed the asset classes investment managers use to build portfolios for their clients. This week we will explore how client portfolios are constructed and change over time as assets are deployed....Asset Allocation: Tools of the Trade
Investment managers divide your portfolio into different types of assets. The technical term is ‘asset allocation’. Some of your investments may be in stocks, some in bonds, some in real estate, and maybe some in another special class. But the whole investment picture relates to your asset allocation. If...Living On the Interest from One Million Dollars
I made my first retirement plan after my freshman year at college. Back at home, with one year of college under my belt, my good friend John and I were discussing our plans for the future. I don’t recall the entire conversation, but I do remember saying “my goal is to accumulate a million dollars,...You Can’t Have It Both Ways!
“The market is discounting the turn in the economy.” Isn’t that a common refrain these days? Every time I turn around, someone on bubblevision or in the blogosphere tells me the reason the market is going up is that it is a leading indicator and portends better days ahead. There has been...Cash is Risky
When considering what to do with the growth-oriented part of your portfolio, have you considered how dangerous it might be to hold cash? Before we get into the nuts and bolts of the problem with cash, let’s review how difficult it is to tactically manage around corrections and bear markets. Having...Is it Too Late to Sell?
Did the market bottom today? Does a VIX near 60 signal capitulation? Are there some compelling buys out there? We don’t know if the bottom is in. Maybe it was today, maybe it is tomorrow. It might be next week. That said, it could be a major mistake to sell out and risk missing the...Risk: The Necessary Evil of Stock Investing
It was another down day at the exchanges. At the close, the Dow had slipped -241 points and the NASDAQ was off -2.0% as well. Stocks fell amid continued problems in the financial sector. And yes, we suffered with you as well. Stocks = Risk It’s hard to admit, but even experienced investment...Lenny Dykstra and Annuities
Take it from someone who has sold them before — annuities are very attractive propositions — at least for the salesman. If an insurance agent can close a $1,000,000 annuity, that one deal can make a year. Not saying there are not situations where annuities make sense, but annuities are often...