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What Are the Components of Asset Allocation?
It’s easy to see that many financial assets are highly correlated — especially large assets. If there is a new sign of an economic slowdown, investors expect the entire S&P 500 index to move lower in response. Similarly, if interest rates rise, investors expected all fixed income investments to fall. The individual stock or bond […]
The Importance of Asset Allocation
Most people are familiar with asset allocation even if they don’t recognize the term. For example, the SEC’s Beginners’ Guide to Asset Allocation uses the example of a street vendor selling both sunglasses and umbrellas. The street vendor would never sell both items at the same time but having both in stock helps even out their revenue regardless of […]
Should You Sell Your Company Stock?
Many people hold an oversized chunk of their portfolios in company stock. While it may be performing well, there is a large body of research that has shown that holding a diversified portfolio of stocks outperforms concentrated stock holdings. You may be unwittingly giving up potential returns that could be compounding over time – potentially […]