Asset Allocation

More articles on asset allocation

Stocks Bonds and Cash

What History Tells Us About Asset Allocation
We believe effective asset allocation leads to investing in the combination of stocks, bonds and cash that has the best chance of achieving your short-term and long-term investment goals. Most investors understand that they can’t reach their investment goals by holding only cash, but are concerned about the volatility of the stock market and the very low yields offered by bonds.

Publication Date:

  • Upgrader Quarterly: Winter 2011

Putting the Pieces Together

Now that you know what history tells us about Stocks, Bonds and Cash, here is a framework for putting this to use. Consider the following example. Practical Allocation Let’s assume that we have two investment accounts: the first account includes money we plan to spend over the next year; the second account, let’s call it account 25 has money that we know we won’t touch for at least 25 years. Given what we know about asset allocation, the first account should be 100% cash because the last thing we want to do is lose any of that money, and the account we won’t touch for 25 years should be 100% stocks, because stocks have clearly offered the best long-term performance potential.

Publication Date:

  • Upgrader Quarterly: Winter 2011

Repositioning Your Portfolio - One Step at a Time

Transitioning your portfolio can be daunting - whether you’re looking to add to your growth potential by taking on more risk, or seeking to buffer yourself by adding to bonds.  The dramatic market shifts we’ve seen these past few years have made investors wary of making changes to their portfolios for fear the market might be on the brink of a major run-up or an abrupt sell-off.
Whether you are looking to increase risk or lower it, we  suggest setting a plan and shifting your portfolio allocations gradually. Here’s how:

Publication Date:

  • Upgrader Quarterly: Spring 2011

Investing Over Time

Example:

  1. An investor has a target of 40% fixed income and 60% equities.
  2. The investor chooses to use FundX Upgrader Fund (FUNDX) and FundX Flexible Income Fund.
  3. Rather than invest all $100,000 at once, the investor elects to invest in four stages, as shown below:

Publication Date:

  • Upgrader Quarterly: Spring 2011

The information provided herein represents the opinions of the advisor, and is not intended to be a forecast of future events or a guarantee of future results, and does not constitute investment advice.