Prosperity Trek by Prosperity Concierge » Asset Allocation http://prosperityconcierge.com/trek The trek to prosperity, step by step. Improve cash flow, build net worth, enjoy life and give back. To earn, spend, save and invest for happiness and fulfillment. Sun, 21 Aug 2011 21:20:25 +0000 http://wordpress.org/ en hourly 1 Take Control of Your Saving and Asset Allocation to Reduce Your Risk http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/control-saving-asset-allocation-reduce-risk/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/control-saving-asset-allocation-reduce-risk/#comments Mon, 09 Aug 2010 01:25:33 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/?p=10010 Your investing goal should be to invest with the understanding that while the growth potential of your nest egg may be out of your control, there are steps you can take to come as close as possible to realizing whatever that potential is.

Taking Control

You need to work really hard on the controllable factors, starting with an aggressive savings

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/control-saving-asset-allocation-reduce-risk/feed/ 0 Asset Allocation Myths http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/asset-allocation-myths/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/asset-allocation-myths/#comments Sat, 24 Jul 2010 15:44:41 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/?p=9851 There are many claims about the benefits of asset allocation. Not all of these claims can be supported by evidence. Here are some common myths about asset allocaton.

Asset allocation protects you from bear markets

Asset allocation is all about identifying fundamentally different asset classes (stocks, bonds, real estate investment trusts), deciding how much of each you want

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/asset-allocation-myths/feed/ 0 Investing Inertia – Overcoming Fear to Reach Your Financial Goals http://prosperityconcierge.com/trek/trek-how-to/building-how-to/investment-vehicles-how-to/investing-inertia-overcoming-fear-reach-financial-goals/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/investment-vehicles-how-to/investing-inertia-overcoming-fear-reach-financial-goals/#comments Tue, 20 Jul 2010 17:41:05 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/?p=9806 Investors’ attitudes today are characterized by ambiguity. Investors don’t know even what the possible outcomes may be, let alone the probability that they might occur. Without a familiar context for financial decision making, it’s easy to become emotionally paralyzed.

The difference between uncertainty and ambiguity may sound like little more than semantics. But neuroimaging studies have found that

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/investment-vehicles-how-to/investing-inertia-overcoming-fear-reach-financial-goals/feed/ 1 Rebalance to Reduce Your Portfolio Risk http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/rebalance-reduce-portfolio-risk/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/rebalance-reduce-portfolio-risk/#comments Wed, 14 Jul 2010 02:37:53 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/?p=9732 Having an allocation of stocks, bonds, and short-term investments appropriate for your goals and tolerance for risk is important, especially when the market is volatile and you may be tempted to make short-term moves.

Although unnerving at the time, history has shown that some of the worst short-term losses in the stock market were often followed

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/rebalance-reduce-portfolio-risk/feed/ 0 Buy and Hold to Build Wealth and Avoid Timing Problem http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/buy-and-hold-to-build-wealth-and-avoid-timing-problem/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/buy-and-hold-to-build-wealth-and-avoid-timing-problem/#comments Fri, 16 Apr 2010 17:24:32 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/learn/enjoy/retire/buy-and-hold-to-build-wealth-and-avoid-timing-problem/ The obvious argument for buying and holding as a strategy to build wealth is that if you try to time the markets it’s virtually impossible that you will sell at the very top or buy back into the market at the very bottom. Blowing this timing can deliver more than a small ding to your

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/buy-and-hold-to-build-wealth-and-avoid-timing-problem/feed/ 0 Every Investor Should Have Investment Rules for Asset Allocation and Rebalancing http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/investor-investment-rules-asset-allocation-rebalancing/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/investor-investment-rules-asset-allocation-rebalancing/#comments Thu, 08 Apr 2010 13:03:19 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/?p=8649 When markets rise or fall, your investment rules tell you exactly what to do with your investment money so that you stay on track to build wealth. You should  have an “investment policy” comprised of  two types of investment rules.

Asset Allocation

The first set of rules are the asset allocation rules. You decide what percentage of your

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/investor-investment-rules-asset-allocation-rebalancing/feed/ 0 Asset Allocation Strategies to Avoid Investing into a Bubble http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/asset-allocation-avoid-bubble/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/asset-allocation-avoid-bubble/#comments Wed, 25 Nov 2009 14:08:31 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/?p=6963 There are three defenses that should limit the damage a bubble can do to you: common sense, diversification and rebalancing.

The first is common sense. Stepping back from the excitement of the investing scene and applying a little old-fashioned independent judgment can often provide a helpful bit of perspective.

Be aware of reversion to the mean. In

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/asset-allocation-avoid-bubble/feed/ 0 How we Invest – Improving our Investment Success http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/invest-improving-investment-success/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/invest-improving-investment-success/#comments Thu, 05 Nov 2009 18:39:07 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/?p=6765 Traditional concepts of finance are built upon the idea of efficient markets in which investors are rational, unbiased, logical, and risk-averse. When investors act in accord with these qualities, a stock’s price equals its value, and no trading strategy should beat the market.

For decades, psychologists have been studying human decision-making.  And contrary to

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/invest-improving-investment-success/feed/ 0 When Markets Turn Volatile – How to Respond http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/markets-turn-volatile-respond/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/markets-turn-volatile-respond/#comments Fri, 30 Oct 2009 18:01:34 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/?p=6494 When markets turn volatile adapt to the changing conditions by adopting rules that can carry your investments through turbulent times.

Too many people get distracted by benchmarks, well-meaning friends, media reports or information from people that know nothing about them.

They forget why they are investing in the first place. The clearer and more specific one is

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/markets-turn-volatile-respond/feed/ 0 Managing Risk – Diversification http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/managing-risk-diversification/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/managing-risk-diversification/#comments Fri, 23 Oct 2009 17:00:15 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/?p=6338 You can manage risk through diversification.

Today, more than ever, geographic diversification should be taken into account.

Studies indicate that asset allocation is the single most important determinant of a portfolio’s long-term success.

The right mix of stocks, bonds and cash – aligned to our particular risk tolerance and investment objective – is very important.

Age-appropriate rebalancing is also

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/managing-risk-diversification/feed/ 0 Buy and Hold or Active Asset Allocation http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/buy-hold-active-asset-allocation/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/buy-hold-active-asset-allocation/#comments Fri, 28 Aug 2009 13:06:10 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/?p=4626 One of the most fundamental decisions an investor must make is whether to “buy and hold” their investments or to make active asset allocation changes as their perceptions of the markets change. We think “buy and hold” works for many investors who don’t have time, temperament or talent to manage and reshuffle their assets every

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/buy-hold-active-asset-allocation/feed/ 0 Strategy: Asset Allocation Resources http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/strategy-asset-allocation-resources-3/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/strategy-asset-allocation-resources-3/#comments Wed, 17 Jun 2009 21:31:27 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/trek-how-to/strategy-asset-allocation-resources-3/ Visit these sites in your search for a fee-only financial planner:

The National Association of Personal Financial Advisors is the nation’s leading organization dedicated to the advancement of fee-only comprehensive financial planning. The Garrett Planning Network Inc. is an international network of fee-only financial advisors and planners. Information Asset Allocation Mix Within Your Portfolio

Visit Morningstar

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/strategy-asset-allocation-resources-3/feed/ 0 Asset Mix http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/asset-mix/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/asset-mix/#comments Tue, 16 Jun 2009 11:16:08 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/trek-how-to/asset-mix/ A fundamental decision in your asset allocation is to determine what percentage to allocate to stocks and bonds. In making that decision you are deciding how much of your investment should belong as an ownership stake (stocks) and how much of it you want to lend (bonds).

In general, bonds have less risk. One reason

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/asset-mix/feed/ 0 Asset Allocation and Diversification – Asset Classes http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/where-to-invest/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/where-to-invest/#comments Tue, 16 Jun 2009 11:15:59 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/trek-how-to/where-to-invest/ If you read all of the noise about investment options you may be tempted to invest in esoteric, out-there, investments and you may be tempted to make your allocation strategy way too complex. Don’t. Keeping it simple is truly the best approach. You won’t increase your return on investment by making it complex. By

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/where-to-invest/feed/ 0 International Investing http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/international-investing/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/international-investing/#comments Tue, 16 Jun 2009 11:15:50 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/trek-how-to/international-investing/ There are several reasons why international stocks should be in your portfolio.

U.S. stocks will make up a decreasing share of the global equity market. The most fundamental reason for this is that growth outside of the U.S., and especially in emerging and frontier markets, will grow faster than growth in the U.S.

Foreign equities will provide

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/international-investing/feed/ 0 Asset Allocation – Think Broadly and Look at the Big Picture http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/asset-allocation-think-broadly/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/asset-allocation-think-broadly/#comments Tue, 16 Jun 2009 11:15:39 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/trek-how-to/asset-allocation-think-broadly/ When looking at your asset allocation think broadly. Look beyond your financial assets. Own a home?…then you’re invested in real estate and your need for a REIT just dropped. Your job is in banking?…then your income stream depends on the financial sector so you’ll want to downplay that in your investments.

There are

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/asset-allocation-think-broadly/feed/ 0 Market Volatility http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/market-volatility/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/market-volatility/#comments Tue, 16 Jun 2009 11:15:39 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/trek-how-to/market-volatility/ Market volatility can be unsettling and our usual reaction is to buckle our seatbelts and prepare for a wild ride. This reflects an attitude of staying the course.

However, when there is substantial volatility it can indicate that new market leadership is emerging. The volatility is an indication of increased market activity. It

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/market-volatility/feed/ 0 Shifting Allocation of Assets – Market Timing http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/shifting-allocation-of-assets/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/shifting-allocation-of-assets/#comments Tue, 16 Jun 2009 11:15:13 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/trek-how-to/shifting-allocation-of-assets/ One of the fundamental considerations in allocation of assets is whether to have a passive, static allocation or to dynamically shift the assets as pricing of asset classes change.

Ben Inker, chief investment officer at GMO, LLC, in his December, 2008 white paper “When Diversification Failed” says:

“…rather than having a static allocation to each class of

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/shifting-allocation-of-assets/feed/ 0 Diversification at Harvard http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/diversification-at-harvard-2/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/diversification-at-harvard-2/#comments Tue, 16 Jun 2009 00:27:57 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/trek-how-to/diversification-at-harvard-2/ We all can get a lesson on the value of diversification by looking at the portfolio of Harvard Management Co., the entity that operates the Harvard endowment fund.

For the fiscal year ending June 30, 2008, the fund had an 8.6% return on investments. That compares to the Standard & Poor’s 500 index (of large

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]]> http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/diversification-at-harvard-2/feed/ 0 Diversification and Asset Allocation in Market Stress http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/diversification-asset-allocation-market-stress/ http://prosperityconcierge.com/trek/trek-how-to/building-how-to/asset-allocation-how-to/diversification-asset-allocation-market-stress/#comments Tue, 16 Jun 2009 00:27:43 +0000 Prosperity Concierge http://prosperityconcierge.com/trek/trek-how-to/panic-attack-2/ There are times when it is difficult to “stay the course”. Occasionally markets will become unsettled and cause you to question your asset allocations. These are times when your long-term investment returns can be most jeopardized by inappropriate action.

Buy Low

When markets are dropping it can be tempting to stop buying. However, since

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