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)
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—Fred G. Gosman (20th century)