Tag: Asset allocation
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Asset Allocation vs Stock Selection
Assets are stocks, bonds, and cash. According to the 1986 landmark study “Determinants of Portfolio Performance” (Brinson, Hood, Beebower), 93.6% of a portfolios return variability was due to asset allocation, not stock selection or market timing. There is still debate on whether asset allocation should be fixed over time (static asset allocation) or should change…
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Nobody Knows
“There is very little “scientific” information about how to invest a portfolio. The few things we know about investing: This lack of information, makes it easier to do your own wealth management.
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Asset Allocation
There are three main asset categories: Stocks, Bonds, and Cash. The proportion of your portfolio in each of these 3 categories is what determines your final total return. Stocks have high risk and high return, bonds have low/medium risk and low return, while cash (money market, CD) has no risk and generally very low return.…
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