Choosing the asset allocation for your investment program is probably THE most important decision you will make. Even more important than the individual stocks, ETFs, mutual funds or bonds that you will select.
Asset allocation explained
Asset allocation is an investment strategy to balance risk and reward. It is the process of dividing and distributing the assets of a portfolio among different investment classes in order to reduce the overall risk exposure. The three most common asset categories are stocks, bonds and cash and... more
Although this website is dedicated to buying stocks and bonds, it is important to have an understanding of the different investment possibilities in order to make the choice that best fits your goals, personality and the level of risk you are willing to take. In this article we will briefly describe the most common types of investments.
Most common types of investments
The two main investment categories are securities and property. When you invest in securities, you are investing in debt, ownership or the legal right to buy or sell an ownership.
The most common type of investment in... more
The Importance of Understanding your Risk Tolerance
As J. Kenfield Morley once said, “In investing money, the amount of interest you want should depend on whether you want to eat well or sleep well”.
Are you sleeping well at night regardless of what the market is doing? If the answer is yes then the asset allocation you have selected to reach your investment objective may be right one for you. When defining your investment strategy, one of your first tasks is to assess the amount of risk you are able to tolerate. Although higher levels of risk are associated with higher potential... more
One of the fundamental characteristics of any investment is that risk and return go hand in hand. The higher the risk you are willing to take, the higher the potential return. There is no such thing as free lunch.
As the famous motorcyclist Evel Knievel once said “Risk is good. Not managing your risk is a dangerous leap”. When applied to buying stocks and building your investment portfolio to meet your financial goals make sure you keep this in mind. Although returns are uncertain, risks can be controlled. The biggest risk you can face is not diversifying your portfolio. If you... more
As Paul Nitze famously said “One of the most dangerous forms of human error is forgetting what one is trying to achieve”. If you are considering investing in stocks this couldn’t be more true. Because of the stock market’s nature and the amount of information we are bombarded with on a daily basis it is easy to forget what we are trying to achieve when buying and selling stocks unless we have defined our goal and the investment strategy we will use to achieve our goal.
Defining a clear goal is one of the first tasks an investor should complete before... more
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