Category Archives: Asset Allocation 101

Asset Allocation & My Investing Strategy

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asset-allocation-post

I really can’t believe I’ve had this site for so long and haven’t laid out my basic investing strategy and asset allocation. As of the writing of this post, just about all of my investing takes place in retirement accounts. Therefore, by default my timeline is very long. However even if this wasn’t the case, I prefer putting my money into stocks or funds that are solid and fundamentally sound. You won’t find me putting my money anywhere near some biotech stock rumored to have a drug getting FDA approval next week or any other random “hot” tips that I come across. If I wanted to gamble with my money I’d much prefer to hit the roulette tables. My Rules For Investing Invest only in things I understand: Meaning no companies in fringe or confusing industries, no overly complex Funds/ETF’s , no weird derivatives, swaps or whatever else so-called “pro’s” invest in. … Continue reading →

Determine Your Risk Tolerance

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In my last post on asset allocation I talked about some basics of what do to with your money based on some time frames in which you thought you would need to use the money. I also gave a general rule of thumb for splitting your portfolio between stocks and fixed income. In this post we’ll take things a step further and discuss how to determine your personal tolerance for risk. One of the most important keys to being a successful investor is to understand your risk tolerance. Which loosely defined means how much variance you’re willing to take on in the short-term for greater gains in the long run. The reason this is so key is because it lets you invest at a level in your comfort zone which makes it easier to stick to your master plan even when the markets turn south. Taking on more risk than you can … Continue reading →

Asset Allocation 101 (Part 1)

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The single most important thing to the success of your investment portfolio after your contributions is your asset allocation. Simply put, your asset allocation is how weighted you are towards different investment types (US Stocks, Bonds, Emerging Markets, etc…). I’m going to say something now that may hurt your feelings, but its 100% true and needs to be said. You aren’t smart enough to beat the market. If you try to be a “trader” and time the ups and downs of the market or constantly try to find the next “hot” stock. You’ll most likely do more harm to your account balance than good. For us small time investors the key is to spread out our risk and try to achieve a return around the market average. But first things first. We have to lay down some ground rules for your hard-earned cash. If you think you’ll need to use the … Continue reading →