Where results make sense

About us   |   Why use us?   |   Reviews   |   PR   |   Contact us

ELCA Board of Pensions > Resources and tools > Investment education > Asset allocation   (Site not responding. Last check: 2007-09-18) Asset allocation is the practice of spreading your savings across different types of investments, also known as asset classes. Asset classes tend to behave differently from one another, going up and down in separate cycles and to varying degrees. If you choose to manage your own asset allocation by investing in single asset class funds (available in the ELCA Build-Your-Own Series), be sure to pay regular attention to how your asset allocation has changed with fluctuations in the stock and bond markets. elcabop.org /resources_tools/investment_education/asset_allocation.asp   (697 words)

Index Funds Advisors - Investing Made Simple - www.ifa.com Better to identify an asset class like growth stocks scientifically and use it for what it is: the polar end of a risk dimension that has always seen good times and bad. Asset classes are most relevant when sorted along these dimensions, as combinations of "small cap," "large cap," "value," and "growth." These asset classes are transparent, focused, and consistent with economic research. Their exposure can be achieved with combinations of large cap and small cap asset classes, and doing so offers the additional benefit of micro-cap engineering and block trading "alpha" at the smaller end. ifa.com /Library/Support/Articles/Popular/WhatMakesanAssetClass.html   (1096 words)

Asset Allocation: Management Style and Performance Measurement Asset allocation is generally defined as the allocation of an investor's portfolio among a number of "major" asset classes. Once a set of asset classes has been defined, it is important to determine the exposures of each component of an investor's overall portfolio to movements in their returns. The exposures of a fund to the various asset classes are, in turn, a function of 1) the amounts that the fund has invested in various securities and 2) the exposures of the securities to the asset classes. www.stanford.edu /%7Ewfsharpe/art/sa/sa.htm   (6123 words)

Asset Allocation   (Site not responding. Last check: 2007-09-18) Asset allocation is the primary tool used to build an ideal diversified portfolio. Asset allocation has been recognized as a very important part of the process of building a portfolio. The firm's chief investment strategist determines the optimal percentage of a typical portfolio that should be invested in particular asset classes at any time, and updates the asset allocation strategy on a regular basis. www.freewebs.com /tntffg/AssetAllocation.htm   (308 words)

Wealth Management Report: Asset Allocation and Diversification - Knowledge@Wharton We chose asset allocation and diversification as the themes because these are the cornerstones of modern portfolio theory, which is based on the notion that investors want to maximize returns and minimize risk in their portfolios. The essential idea is that holding assets that are correlated to one another (that is, assets that tend to move in the same direction at the same time) increases the risk associated with a portfolio, while holding assets that are less correlated to one another decreases the risk associated with a portfolio. The "right" asset allocation for this person is a function of four factors: the value of his or her portfolio today, the amount this person wants to have accumulated by retirement, the number of years until retirement, and the amount he or she plans to save each year in the interim. knowledge.wharton.upenn.edu /index.cfm?fa=viewFeature&Id=984   (9089 words)

Asset Allocation Software for Investment Management. Asset allocation Models are commonly used with smaller accounts (e.g., under $100,000) that are not profitable enough to do a lot of detailed custom work. The only life factor that determines the asset allocation mix (which portfolio model to use) is one of the five most commonly used investment risk tolerance categories. All three asset allocation tools come with one-time mutual fund picks for 19 asset classes for fee-based accounts, no-load accounts, and all-load mutual fund investment accounts (57 total). www.toolsformoney.com /asset_allocation.htm   (1652 words)

How to Improve Asset Allocation Asset allocation, discussed for years as an invaluable strategy for long-term investors, seemed to be the odd-man out in the equity run-up of the 1990's. Each asset class has its own cycle, so it is important to have different asset classes that are counter cyclical to each other in order to have a portfolio that is balanced and has a low volatility. With an asset allocation approach dedicated to the proper use of low-correlated asset classes, and supported by decades of investment research, your clients will soon be back on the path of long-term investment growth. www.gold-eagle.com /editorials_03/holmes060103.html   (710 words)

Institutional fund management - Encyclopedia.WorldSearch   (Site not responding. Last check: 2007-09-18) The skill of the successful fund manager consists in constructing the asset allocation, and separately the individual holdings, so as to outperform the peer group of competing fund management organisations, and the bond and stock indices (appropriate to the client's objectives and preferred style). A good deal of importance tends to attach to the evidence about long term returns to different assets, and to holding period returns (that is the returns that accrue on average over holding periods of different length). if the assets are held against some long-term final salary pension obligation), as well as issues internal to the portfolio such as the volatility of the returns of individual holdings and cross-correlations between the returns. encyclopedia.worldsearch.com /institutional_fund_management.htm   (1841 words)

Asset classes   (Site not responding. Last check: 2007-09-18) Assets are divided into classes according to what kind of asset they are and the amount by which they are expected to increase in value. When selecting an asset class/es it is important to establish the expected growth/return and the potential risk before making a decision. The graph does not include returns for the asset classes infrastructure and development capital as they have been only recently defined as separate asset classes. www.arf.com.au /assetclasses.asp   (260 words)

Senior World Online - Articles Allocating portions of your savings to various asset classes should be consistent with your retirement objectives, by choosing a diversified array of investment options from your plan, noted a spokesperson from Diversified Investment Advisors, a national investment advisory firm. Within your retirement savings plans, these asset classes are typically offered to you in a menu of different types of investment options, such as a bond or growth stock portfolio or a money market fund. The better diversified you are in each asset class and within each investment option, the better protected you are from any one investment going sour -- thus dragging your entire nest egg down with it. www.seniorworld.com /articles/a19991130190234.html   (374 words)

Financial Guide: ASSET ALLOCATION: How To Diversify For Maximum Return The asset classes should balance each other in a way that will give the best return for the degree of risk you are willing to take. Asset allocation is based on the proven theory that the type or class of security you own is much more important than the particular security itself. This is because the proper blend of six or seven asset classes will allow you to benefit from the returns in all of those classes. www.gofso.com /Premium/IS/fg/fg-Assets.html   (2229 words)

Evanson Asset Management - Asset Allocation for Bears I'd also like to note that a substantial body of research indicates that while asset class allocations are the prime determinant of overall portfolio returns, we can't predict with certainty which asset classes will outperform in the future. The major weaknesses of the bearish perspective are its assumption that specific asset class moves can be predicted in advance and actively managed for profit, and that macroeconomic analysis is a useful tool for enhancing portfolio performance. A large body of research suggests that asset class trends and economic variables are unpredictable and cannot be timed, and without a benchmark, results may be due to chance. www.evansonasset.com /index.cfm/Page/18.htm   (4046 words)

WWWFinance - Historical Returns: Campbell R. Harvey These asset classes are informally organized by "risk." That is, most people would consider Treasury bill returns relatively risk-free compared to a portfolio of low capitalization (market price times number of shares outstanding) equities. The historical analysis of these asset classes supports the basic idea that there is a positive relation between risk and reward. Although it is difficult to see, the U.S. average return performance is the lowest of all the asset classes. www.duke.edu /~charvey/Classes/ba350/history/history.htm   (1501 words)

American Skandia - Asset Classes   (Site not responding. Last check: 2007-09-18) For instance, equity (stock) asset classes are delineated by market capitalization, which is the number of shares outstanding multiplied by the stock's current market price. Equity or stock asset classes are often categorized according to the size of their market capitalization (number of outstanding shares multiplied by current stock price.) Asset classes for stocks are further refined into growth stock or value stock categories according to their potential total return over time. Asset classes are used in an asset allocation strategy to help control the risk and return levels of your portfolio. www.americanskandia.prudential.com /page/0,2225,5256,00.html   (892 words)

Path to Investing — Asset Classes   (Site not responding. Last check: 2007-09-18) The extent to which asset classes perform similarly to one another is called correlation. Correlation measures the movement of one asset class relative to another, and ranges from –1 to +1. A correlation of –1 means that the two assets move in opposite directions, while a correlation of +1 indicates that two assets move together. www.siainvestor.com /experts/perspective/ibbotson_one.htm   (129 words)

Barra | Newsletter 171 | Aggregating Risk across Multiple Asset Classes For example, assets may be "grouped" according to their similarity, with assets within a single group being treated as homogeneous. There are three broad classes of problems which arisefrom a failure to manage aggregate risk; these are (i) a potential compounding of unintended bets and uncompensated exposures to risk, (ii) unwarranted over-diversification or the reverse, concentration, and (iii) misallocation of resources. This consistency requirement boils down to computing a cross asset class factor covariance matrix that is consistent with the single asset class factor covariance matrices. www.barra.com /Newsletter/Nl171/aggregate.asp   (1509 words)

How to Improve Asset Allocation The interrelationship of individual asset holdings was identified by the noble laureate in the context of the classic investment trade-off between risk and return. Further, different asset classes have different cycles, which are measured by the length of time and amplitude (volatility) of their cycle. Investors can rebalance their weighting in the different asset classes at least once per year to mitigate the urge to chase performance and concentrate on capturing performance and managing risk in a systematic way. www.gold-eagle.com /editorials_03/holmes053003.html   (1187 words)

A Timely Reminder: The recent market tumult offers a perfect opportunity to remember the advantages of a diversified, ... Gibson's multiple asset investing might be less urgent at a time when equities are the stars of the investing, and stocksas measured by the S&P 500have recorded five consecutive years of 20% gains or more. Although one would expect that asset classes with similar volatility levels would have similar long-term growth paths, we are pedagogically fortunate to have the four equity asset class returns in our analysis be as close as they are. To evaluate the desirability of an asset class as a portfolio building block, it is not enough to know only its return and volatility characteristics. www.financial-planning.com /pubs/fp/20001001022.html   (5784 words)

Dogs of the Dow - Asset Allocation Asset allocation is the specific mix of investment instruments that an investor holds in a diversified portfolio. There are many different investment vehicles (asset classes) including stocks, bonds, real estate, gold, silver, commodities, etc. Asset allocation is the process of deciding how much of each type of investment across all asset classes should be held. The asset allocation model each investor chooses will be based on the amount of risk they are willing to accept as well as the time frame of their investments. www.dogsofthedow.com /Asset_Allocation.htm   (165 words)

Investor Home - Asset Allocation Asset classes can be classified in broad terms like stocks, bonds, and cash or they can subdivided further into large-cap and small-cap, value and growth, international, and combinations of each. The goal of asset allocation is to achieve the highest return for the acceptable level of risk, or alternatively the lowest risk for a needed rate of return. Adding high risk asset classes and investments to a portfolio may seem risky, but its likely the net effect will be to both increase returns and lower the risk of the portfolio. www.investorhome.com /asset.htm   (1038 words)

FSO Editorials: It's Much Later Than You Think by Robert B. Gordon 12/10/2003 Fortunately, using the right asset classes, it is possible to suggest portfolios for both groups, the haves and the have nots. Yes, selecting the right asset classes is most important at the start but, after the first year, periodic rebalancing, becomes much more important to the long term success of your portfolio. The major and minor asset classes are what is important in every bear market And do not underestimate the great importance played by the stable asset classes. www.financialsense.com /editorials/gordon/2003/1210.html   (3072 words)

Asset Class Investing Book Review Using statistical analysis, Markowitz and Sharpe demonstrated that the majority (about 94%) of the returns from investments depend on asset class selection, not stock selection and market timing. Some asset classes tend to fluctuate in the opposite direction from others -- for example, when stock prices rise, bond prices tend to decline. By constructing a blended portfolio of different asset classes, the risk or volatility can be statistically estimated. www.profitadvisors.com /asset.shtml   (440 words)

401khelpcenter.com - 401k Asset Allocation Made Simple As you accumulate retirement assets, the most important decision you need to make is how the assets are going to be invested. The allotting of your retirement assets across stocks, bonds, money market, and other investments is referred to as asset allocation. Remember, this information is provided as general guidance on the subject of asset allocation and is not provided as legal, tax or investment advice. www.401khelpcenter.com /allocation.html   (484 words)

Pooled Investment Portfolio Asset Classes   (Site not responding. Last check: 2007-09-18) Until fully funded, the assets will be invested on a pro-rata basis across the equities and other alternatives asset classes. Investments are made through fund of funds managers, meaning the manager creates a portfolio by investing with a pool of managers with investment specialties by either industry sector or stage of financing. The expectation for this asset class is strong performance that will move independently from the public equities markets. www.foundation.uconn.edu /pooled_investment_portfolio_assets.htm   (1369 words)

FSO Editorials: A Simple Portfolio for Serious Investors by Robert B. Gordon 07/11/2003   (Site not responding. Last check: 2007-09-18) Please note that we pick these asset classes, not only on the basis of past performance, but on their expected differences under future market conditions. The precious metals class will provide expected long-term gains from gold and silver bullion and gold stocks plus further gains by transfers to and from other asset classes resulting from gold and silver’s volatility. However we know from our e-mail there are many investors who have chosen a much riskier position for their assets with large positions in a single asset class such as precious metals. www.financialsense.com /editorials/gordon/2003/0711.htm   (2391 words)

Why Diversify?   (Site not responding. Last check: 2007-09-18) Here are several "periodic tables" that show how various asset classes performed over the past two decades. Note that there is no discernible pattern as to which asset classes would outperform each year. The Importance of Diversification [Pimco Advisors, 1994-2003] "From year to year, there’s no telling which asset classes will be the best performers—a strong argument for portfolio diversification. www.bylo.org /whydiversify.html   (277 words)

Do Your Asset Classes Care Where They Are? From time to time I get asked whether a dollar of a given asset class in a tax-sheltered account is equivalent, for the purposes of policy allocation, to a dollar in a taxable account. Thus, to the extent that asset classes in sheltered and taxable accounts are fungible—that is, freely exchangeable—it makes no sense to discount sheltered dollars by the ordinary tax rate (and taxable dollars according to the proportion of capital gains due). While fungible asset classes held in taxable and sheltered accounts are equivalent in the present, this doesn’t hold if the future returns of the two pools are greatly different. www.efficientfrontier.com /ef/704/where.htm   (949 words)

Safe withdrawals for portfolios with 3 or more asset classes. Most of the studies on retirement withdrawals such as the Trinity Study and the Retire Early Study on Safe Withdrawal Rates limit the investment mix to two asset classes (i.e., short-term fixed income securities and an S&P500 index fund). Also, while it’s true that holding several asset classes reduces the standard deviation of the portfolio, it may also reduce your returns. Texas-based financial planner Jaye Jarrett did a retirement withdrawal study in 1999 that considered three asset classes using a data series from 1926 to 1998. www.retireearlyhomepage.com /3asset.html   (424 words)

Try your search on: Qwika (all wikis)

About us   |   Why use us?   |   Reviews   |   Press   |   Contact us   Copyright © 2005-2007 www.factbites.com Usage implies agreement with terms.