Analyze Asset Allocation and Diversification
Two of the most important decisions an investor must make when constructing portfolios are 1) the allocation of the portfolio assets between stocks, bonds, cash and other investments and 2) the diversification of securities within those asset classes. These decisions will not only determine the risk character of the portfolio, they will also provide a major explanation for the portfolio's return. All too often, individuals become over-weighted in a specific asset class, stock sector, or stock size and unknowingly add excessive risk to their portfolio. Investors who recognize the importance of allocation and diversification are able to identify rebalancing changes needed for a balanced and successful portfolio.
The various links below illustrate some of the Investment Account Manager tools that enable the investor to focusing on these important aspects of portfolio management, leading to better investment success.
Next - Optimize Tax Decision Making and Preparation >>
Two of the most important decisions an investor must make when constructing portfolios are 1) the allocation of the portfolio assets between stocks, bonds, cash and other investments and 2) the diversification of securities within those asset classes. These decisions will not only determine the risk character of the portfolio, they will also provide a major explanation for the portfolio's return. All too often, individuals become over-weighted in a specific asset class, stock sector, or stock size and unknowingly add excessive risk to their portfolio. Investors who recognize the importance of allocation and diversification are able to identify rebalancing changes needed for a balanced and successful portfolio.
The various links below illustrate some of the Investment Account Manager tools that enable the investor to focusing on these important aspects of portfolio management, leading to better investment success.
To meet long-term investment goals, most investors will need to maintain a well-balanced portfolio of stocks, bonds, cash and other investments. The Portfolio Allocation by Asset Class view identifies rebalancing needs for a portfolio based on user defined portfolio allocation targets as compared to current portfolio allocation weightings.
A successful approach to investing in common stocks includes the ability for investors to set target allocations for their stock holdings based on sector and size, and then identify rebalancing needs for their portfolio. The Portfolio Allocation by Sector view identifies the rebalancing needs for a portfolio based on user defined portfolio allocation targets as compared to portfolio allocation weightings for common stocks based on sector.
Just as sector allocation is important for improved portfolio management, investors need to be aware of the allocation by stock size of their holdings. The Portfolio Allocation by Size view identifies the rebalancing needs for a portfolio based on user defined portfolio allocation targets as compared to portfolio allocation weightings for common stocks based on size.
Mutual Funds and Exchange Traded Funds can be further organized by Investment Objective. IAM provides a comprehensive report and graph showing important details on the allocation of your funds in your investment portfolio(s).
Next - Optimize Tax Decision Making and Preparation >>
