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I may not understand the how the next step is implemented in this enviro...
Suggestion by Telder on 2009-06-03 14:29:18
I may not understand the how the next step is implemented in this environment; in other words I understand the importance of asset allocation but I would like more on the how's of asset allocation; I get the why's of asset allocation but how ??? sector based ?? sector / industry based ?? I mean the hypothetical investor who is 40 years old is supposed to be 60% equities and 30% in bonds and 10% in cash a good equity allocation plan could be to examine the existing sectors and choose the top stock in each of the 10 sectors like exxon (oil and gas) like goldman sachs (financials) like mcdonalds (consumer services) like google (technology) like walmart co(consumer goods) or netflix like bmy (healthcare) and at&t (telecomm) and your local water / electric / natural gas here mine would be pnm (utilities) ba (industrials) like dow (basic materials) why do you want to have bonds and stocks because in most (not all) events when stocks go down bonds go up why not have an equal ratio of bonds and stocks ? because most people want to make (grow) money and only later much later in life are into preservation of capital; and it seems if you want to make money the bias needs to be toward stocks or their indexes. so why pick stocks at all why not buy ETF's associated with each sector ? if I was a new investor this would be the safest way in with a good bang for your investment buck while still being diversified and allocating risk nicely except when the market crashes in such a way as there might be no where to hide except in cash. Retrieved from "http://www.wikinvest.com/wiki_talk/Asset_Allocation"
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I may not understand the how the next step is implemented in this environment; in other words I understand the importance of asset allocation but I would like more on the how's of asset allocation; I get the why's of asset allocation but how ???
sector based ??
sector / industry based ??
I mean the hypothetical investor who is 40 years old is supposed to be 60% equities and 30% in bonds and 10% in cash
a good equity allocation plan could be to examine the existing sectors and choose the top stock in each of the 10 sectors like exxon (oil and gas) like goldman sachs (financials) like mcdonalds (consumer services) like google (technology) like walmart co(consumer goods) or netflix like bmy (healthcare) and at&t (telecomm) and your local water / electric / natural gas here mine would be pnm (utilities) ba (industrials) like dow (basic materials)
why do you want to have bonds and stocks because in most (not all) events when stocks go down bonds go up
why not have an equal ratio of bonds and stocks ? because most people want to make (grow) money and only later much later in life are into preservation of capital; and it seems if you want to make money the bias needs to be toward stocks or their indexes.
so why pick stocks at all why not buy ETF's associated with each sector ? if I was a new investor this would be the safest way in with a good bang for your investment buck while still being diversified and allocating risk nicely except when the market crashes in such a way as there might be no where to hide except in cash.
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