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Entries Tagged as 'asset classes'

Define Diversification

April 23rd, 2010 · 3 Comments · Diversification, Investment Planning, Online Investing For Dummies, Portfolio Management, Risk Management

Diversification is the act of, or the result of, achieving variety. In finance, and investment planning, diversification is a portfolio strategy combining a variety of assets to reduce the overall risk of an investment portfolio.
 
Proper diversification will optimally combine non-correlated asset classes in such a manner that company specific risk, industry risk, market risk, and [...]

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Is Buy And Hold A Viable Strategy?

November 14th, 2009 · 3 Comments · Investment Planning, Online Investing For Dummies, Portfolio Management, Risk Management

By Ken Faulkenberry
The purpose of asset allocation is to reduce volatility of the overall portfolio by holding different asset classes that are not correlated. Holding multiple uncorrelated assets means assets will be performing differently by rising and falling at different times. This helps smooth out returns; reducing volatility (risk) of the total portfolio.
 
A buy and [...]

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Asset Allocation: The Critical Element of Diversification

August 15th, 2009 · 15 Comments · Diversification, Investment Planning, Portfolio Management, Risk Management

By Ken Faulkenberry
Diversification is the single most critical element of investment management. How an investor allocates investment funds to different asset categories or groups is called asset allocation, and is the most important fundamental of diversification.  Asset allocation involves dividing an investment portfolio on a percentage basis among different categories of securities (international stocks, domestic [...]

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