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Portfolio Asset Allocation Strategies

March 7, 2014

Asset allocation refers to the balance between growth- and income-oriented investments in a portfolio. This allows the investor to take advantage of the risk/reward trade off and benefit from both growth and income. Building an appropriate asset mix plays a determinant role in a portfolio’s overall risk and return. A portfolio’s asset mix should reflect goals at any point in time.

Basic steps to asset allocation consist of:

  • Choosing which asset classes (stocks, bonds, money market, real estate, precious metals, etc.)
  • Selecting the ideal percentage (the target) to allocate to each asset class
  • Identifying an acceptable range within that target
  • Diversifying within each asset class

Asset allocation can be an active process to varying degrees or passive in nature. Asset allocation strategies listed should be used only as general guidelines on how investors may use asset allocation as a part of their core strategies.

  • Constant-Weighting Asset Allocation
  • Strategic Asset Allocation
  • Tactical Asset Allocation
  • Dynamic Asset Allocation
  • Insured Asset Allocation
  • Integrated Asset Allocation

Read full article “Portfolio Asset Allocation Strategies”

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