Jul 27, 2016
Asset allocation is a subject we’ve covered at various times here on MeaningfulMoney as it is a core tenet of successful investing. But how do you apply it in real life to your investments? Is there such a thing as a ‘correct’ asset allocation? Let’s find out…
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Practical Asset Allocation
Last week we talked about risk tolerance and risk capacity, and I suggested that you should maybe get your own risk tolerance measured over at myrisktolerance.com and then conduct a couple of thought experiments to see where you might sit. That’s entirely theoretical though, and it may be the case that only once you have some skin in the game, i.e. some real money invested, that you’ll really know how you will cope with the inherent risk that comes wth investing.
But how do you apply the theoretical to the real world? Let’s try to give you a start…
In this session, you'll discover:
- What Asset Allocation is, and how it works
- The difference between Strategic and Tactical Asset Allocation, and why you should embrace one and ignore the other
- That there's no such thing as an optimal asset allocation
- Why you should start simple and build up carefully
- What kinds of funds you should actually buy to populate your asset allocation
- The off-the-shelf solution which will save you a load of work
Resources mentioned in this week's show
Risk Profiling: myrisktolerance.com
Podcast: Season 2, Episode 1 - Why Invest?
Podcast: Season 2 Episode 2 - Risk, Volatility & Timescale
Podcast: Season 2 Episode 3 - Know Yourself: Risk Tolerance & Risk Capacity Try Audible for Free
Previous Posts on Asset Allocation
Podcast: Asset Classes, or stuff you can invest in Podcast: Investment Masterclass: Asset Allocation
Videos on each asset class
Cash Gilts Corporate Bonds Shares Property Commodities Gold Hedge Funds The Rest
Free email course - Learn How To Invest
And of course, there is a full transcript available by clicking the big blue button below: TRANSCRIPT COMING SOON!
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Question: How have you set up your asset allocation?
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