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Asset Allocation

When creating a portfolio the right balance between assets and investments is called asset allocation. We believed that asset allocation should consider three factors. 1) The person's age 2) The person's Risk Tolerance and 3) The person goals.



1.- The general rule concerning the age of the investor is that you take the investors age, subtract that from 100 and that should give you the maximum amount of stocks and equities percentage that individual should keep in his or hers portfolio. (i.e. Alex is 35 years old, 100-35=65, so this means that Alex should consider allocating 65% of his portfolio to equities and/or stocks)
2.- Concerning Fixed income and Cash the age comes in to play again. The general rule states taking the investors age and allocating that amount to a fixed income investment and/or cash.

3.- The investor risk tolerance also is a very important factor on asset allocation, here we have to remember that the greater the risk the greater the return.

Finally personal goals are very important to this equation, science children education, personal satisfaction and retirement are key factors in allocation assets.


Please keep in mind that asset allocation is an ongoing task for the professional investor, since the changes in the economy, the markets and international forces have a direct influence on what the right convention of investments you should have in your portfolio

It is TIME IN THE MARKET what will give you a good return ....


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