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Don’t put all your eggs in one basket Balancing Risk

Tchavdar Elenkov, BA Econ, CFP Insurance and Financial Advisor. Don’t put all your eggs in one basket Balancing Risk. Agenda. What is asset allocation?. Can you pick the next winner?. Factors to consider when choosing an asset allocation strategy. Next steps. What is asset allocation?.

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Don’t put all your eggs in one basket Balancing Risk

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  1. Tchavdar Elenkov, BA Econ, CFP Insurance and Financial Advisor Don’t put all your eggs in one basket Balancing Risk

  2. Agenda • What is asset allocation? • Can you pick the next winner? • Factors to consider when choosing an asset allocation strategy • Next steps

  3. What is asset allocation?

  4. W H A T I S A S S E T A L L O C A T I O N ? Don’t put your eggs in one basket • Allocating investments amongst different types of assets

  5. Can you pick the winner?

  6. C A N Y O U P I C K T H E W I N N E R ? No consistent asset class outperforms

  7. C A N Y O U P I C K T H E W I N N E R ? Which asset class is right for you? • How much you invest in each asset class depends on: • Personality • Financial goals • Risk tolerance

  8. C A N Y O U P I C K T H E W I N N E R ? Where are you in the life spectrum? Young investor • Interested in maximum growth over the long-term Pre to Post-retirement investor • Interested in protecting the wealth you have worked so long and hard to accumulate

  9. Factors to consider

  10. F A C T O R S T O C O N S I D E R Consider the following factors • Time Horizon • Risk Tolerance • Liquidity issues • Tax concerns • Legal constraints • Unique circumstances • Investment reporting

  11. Next Steps

  12. N E X T S T E P S Step 1 – Visit your financial advisor

  13. N E X T S T E P S Step 2 – Create your own portfolio • Choose an investment with an AA strategy you can live with • OR • Create your own asset allocation portfolio

  14. N E X T S T E P S Step 3 – Review your investments • How much risk must I assume to achieve reasonable growth? • Is my strategy going to provide the highest after-tax returns? • Are the fund managers truly specialists in the areas that they invest? • Is the strategy congruent with my time horizon(s)?

  15. N E X T S T E P S Step 4 – Rebalance your portfolio • Regular portfolio rebalancing should be undertaken

  16. N E X T S T E P S Step 5 – Remix your portfolio • Re-run and tweak your portfolio models

  17. N E X T S T E P S Step 5 – Periodic reviews • To determine if changes in your desired approach are warranted

  18. Things to remember

  19. T H I N G S T O R E M E M B E R Talk to your advisor… • …to determine if there is an asset allocation strategy appropriate to you

  20. T H I N G S T O R E M E M B E R Consider pre-packaged funds… • …for all or part of your investment portfolio

  21. T H I N G S T O R E M E M B E R Consider implementing a rebalancing strategy… • …or investing in asset allocation portfolios from providers that offer automatic re-balancing or re-mixing services

  22. T H I N G S T O R E M E M B E R Review your individual funds… • …to make sure you get what you are expecting • … to ensure that someone is “managing the managers”

  23. T H I N G S T O R E M E M B E R Review your investment portfolio… • …on a regular basis to ensure it is reflective of your short term and long-term lifestyle goals

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