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:
“When ... did the word “temperament” come into fashion with us?... whatever it stands for, it long since became a great social asset for women, and a great social excuse for men. Perhaps it came in when we discovered that artists were human beings.”
—Katharine Fullerton Gerould (1879–1944)
“If mothers are to be successful in achieving their child-rearing goals, they must have the inner freedom to find their own value system and within that system to find what is acceptable to them and what is not. This means leaving behind the anxiety, but also the security, of simplistic good-bad formulations and deciding for themselves what they want to teach their children.”
—Elaine Heffner (20th century)
“True balance requires assigning realistic performance expectations to each of our roles. True balance requires us to acknowledge that our performance in some areas is more important than in others. True balance demands that we determine what accomplishments give us honest satisfaction as well as what failures cause us intolerable grief.”
—Melinda M. Marshall (20th century)