Asset Allocation and Achieving Balance
Asset allocation is the process of determining the mix of stocks, bonds and other classes of investable assets to match the investor's risk capacity, which includes attitude towards risk, net income, net worth, knowledge about investing concepts, and time horizon. Index funds capture asset classes in a low cost and tax efficient manner and are used to design balanced portfolios.
A combination of various index mutual funds or ETFs could be used to implement a full range of investment policies from low risk to high risk.
Read more about this topic: Index Fund
Famous quotes containing the words asset, achieving and/or balance:
“Imagination is a valuable asset in business and she has a sister, Understanding, who also serves. Together they make a splendid team and business problems dissolve and the impossible is accomplished by their ministrations.... Imagination concerning the world’s wants and the individual’s needs should be the Alpha and Omega of self-education.”
—Alice Foote MacDougall (1867–1945)
“Virtues are not emotions. Emotions are movements of appetite, virtues dispositions of appetite towards movement. Moreover emotions can be good or bad, reasonable or unreasonable; whereas virtues dispose us only to good. Emotions arise in the appetite and are brought into conformity with reason; virtues are effects of reason achieving themselves in reasonable movements of the appetites. Balanced emotions are virtue’s effect, not its substance.”
—Thomas Aquinas (c. 1225–1274)
“At last I feel the equal of my parents. Knowing you are going to have a child is like extending yourself in the world, setting up a tent and saying “Here I am, I am important.” Now that I’m going to have a child it’s like the balance is even. My hand is as rich as theirs, maybe for the first time. I am no longer just a child.”
—Anonymous Father. Ourselves and Our Children, by Boston Women’s Health Book Collective, ch. 5 (1978)