Tag Archives | asset allocation

Standard_deviation_diagram-300x212

What returns give, volatility takes away.

Many people focus on just returns, thinking that the higher the return the better their results. The consequences of such a focus while saving money are not felt as much (buying low) as they are once retired (selling low) and trying to manage the pot of money to give income for the rest of one’s life. Let’s take […]

Continue Reading · 3
blackswan

Black Swan Portfolio Construction – is it possible?

Black Swan events are events that come as a surprise … like the surprise of seeing a black swan when most swans are white in color. How do you invest in Black Swan markets? Such events are “often inappropriately rationalized after the fact with the benefit of hindsight.” (Wikipedia). Most people then try to rationalize […]

Continue Reading · 1
dividends

Individual Bonds or Bond Funds or Dividends?

Most people think income can come only from income sources like dividends or bonds. For a discussion about dividends:  The Dividend Income Illusion and Should You Just Focus on Dividends? This blog briefly summarizes considerations between individual bonds and bond funds, should provide a brief summary of how each compares to the other, when combined with the below […]

Continue Reading · 2
thoughts head

Retirement … when you crack open the egg …

So … when you finally retire and crack open your nest egg … does the income come from dividends and interest, should it come from capital gains by selling the stocks that have gone up? You know, money doesn’t know how it was created. A Total Return approach balances all the issues related to “scraping” […]

Continue Reading · 1
Allocation

Diversification … how many pieces to the pie?

First, what is the difference between diversification and asset allocation? Diversification means the mathematical process to reduce risk through the use of many different types of assets.  Diversification: on Wikipedia. Asset class is the definition of the types of assets that go into diversification formulas. Asset Class discussion on Investopedia. Asset allocation is when risk versus reward are […]

Continue Reading · 6