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Asset Allocation Demystified : A Self-teaching Guide : The Demystified Series - Paul Lim

Asset Allocation Demystified : A Self-teaching Guide

The Demystified Series

By: Paul Lim

Paperback Published: 24th June 2014
ISBN: 9780071809771
Number Of Pages: 240

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How you combine your different assets can be more important than the actual assets you invest in. This easy-to-understand guide shows you how to balance risk vs. reward using various mixes of stocks, bonds, real estate, foreign currency, derivatives, commodities, and alternative investments.

Asset Allocation DeMYSTiFieD explores strategic and tactical asset allocation strategies, along with modern portfolio theory in which future risks and returns are weighed based on history.

Packed with practice exercises and chapter-ending quizzes that reinforce what you learn, this practical, hands-on guide provides all the knowledge and insight you need to build a solid portfolio, whether you're looking for short-term gains or long-term growth.

This fast and easy guide features:

  • A detailed overview of the underlying principles of asset allocation
  • Proven methods for increasing longterm returns while managing risk
  • Tools and techniques for determining investment personality and goals
Simple enough for a novice but challenging enough for an experienced investor, Asset Allocation DeMYSTiFieD helps you make smart strategic decisions to build a powerful portfolio.

About the Author

Paul Lim (Milton, MA) is a senior editor at Money. He previously served as chief financial correspondent for U.S. News & World Report and wrote a personal finance column for the Los Angeles Times.

CHAPTER 1 What Is Asset Allocation? 1 What Defines "Proper" Asset Allocation? 1 Why Asset Allocation Matters 4 How Much Does Asset Allocation Matter? 9 Why Investing Matters 9 What You'll Learn from this Book 11 Quiz 13 CHAPTER 2 The Underpinnings of Asset Allocation 15 Predicting Asset Performance in the Short Run 18 Predicting Asset Performance in the Long Run 19 Different Asset Classes Take Turns Leading the Market 20 Diversification May Fail You 22 Under Most Circumstances, Diversification Works 23 The Markets Are Largely Efficient 24 Investors Care About Risk as Much as Return 25 Quiz 28 CHAPTER 3 The Building Blocks of Asset Allocation 31 Your Stocks 31 Your Bonds 49 Quiz 60 CHAPTER 4 Establishing a Strategic Plan 63 Your Age 63 Your Time Horizon 64 Your Risk Tolerance 67 Your Savings and Wealth 68 Start Simple: Age-Based Rules 70 Basic Allocation by Life Stage 73 Quiz 79 CHAPTER 5 Subasset Allocation 81 Your Stocks 81 Your Bonds 89 Your Strategic Plan 92 Quiz 96 CHAPTER 6 Making Tactical Adjustments and Tilts 99 How to Make Tactical Shifts 100 Common Tactical Moves 105 Quiz 120 CHAPTER 7 Alternative Approaches and Assets 123 Leverage and Life-Cycle Investing 124 Human Capital and Asset Allocation 127 A Rising Glide Path 131 A Flat 60/40 Approach 134 Alternative Assets 138 Quiz 150 CHAPTER 8 Establishing a Rebalancing Strategy 153 If You Don't Rebalance, the Market WillRebalance for You 154 Understand the Math of Recovery 157 Appreciate the Odds of Losing 158 Beware of Being Whipsawed 160 The Purpose of Rebalancing 160 Rebalancing Methods 165 Quiz 175 CHAPTER 9 Automating Your Asset Allocation Strategy 177 Option 1: Old-Fashioned Balanced Funds 178 Option 2: Risk-Based Asset Allocation Funds 186 Option 3: Target Date Life-Cycle Funds 191 Quiz 200 Final Exam 203 Answers to Quizzes and Final Exam 219 Index 221

ISBN: 9780071809771
ISBN-10: 0071809775
Series: Demystified
Audience: Professional
Format: Paperback
Language: English
Number Of Pages: 240
Published: 24th June 2014
Publisher: McGraw-Hill Education - Europe
Country of Publication: US
Dimensions (cm): 23.5 x 19.0  x 1.2
Weight (kg): 0.49
Edition Number: 1

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