Book description
An easy-to-understand how-to guide to the single most important thing you can do in investing — choosing and mixing your assets successfully.
You don't need to be an expert analyst, a star stock-picker, or a rocket scientist to have better investment results than most other investors. You just need to allocate your assets in the right way, and have the conviction to stick with that allocation.
The big secret behind asset allocation — the secret that most sophisticated investors know and use to their benefit — is that it's really not all that hard to do.
Asset Allocation For Dummies serves as a comprehensive guide to maximizing returns and minimizing risk — while managing taxes, fees and other costs — in putting together a portfolio to reflect your unique financial goals.
Jerry A. Miccolis (Basking Ridge, NJ), CFA®, CFP®, FCAS, MAAA is a widely quoted expert commentator who has been interviewed in The New York Times and the Wall Street Journal, and appeared on CBS Radio and ABC-TV. He is a senior financial advisor and co-owner of Brinton Eaton Wealth Advisors (www.brintoneaton.com
), a fee-only investment management, tax advisory and financial planning firm in Madison, N.J. Dorianne R. Perrucci (Scotch Plains, NJ) is a freelance writer who has been published in The New York Times, Newsweek, and TheStreet.com, and has collaborated on several financial books, including I.O.U.S.A, One Nation, Under Stress, In Debt (Wiley, 2008).
Table of contents
- Copyright
- About the Authors
- Acknowledgments
- Publisher's Acknowledgments
- Introduction
-
I. Discovering the Not-So-Secret Recipe for Asset Allocation
- 1. Understanding Asset Allocation
-
2. Weighing Risk and Return
- 2.1. Measuring Return
- 2.2. Measuring Risk
- 2.3. Evaluating the Trade-Off between Risk and Return
-
3. Making Sense of Asset Classes
-
3.1. Identifying the Traditional Classes
- 3.1.1. Embracing equities: Stocks and stock funds
- 3.1.2. Getting a handle on fixed-income investments: Bonds, bond funds, and more
- 3.1.3. Capitalizing on cash and cash equivalents
- 3.2. Understanding Alternative Investments
- 3.3. Going Global with International Investments
-
3.1. Identifying the Traditional Classes
-
4. Determining the Right Proportions: Your Asset Mix
- 4.1. Putting the 90 Percent Solution to Work for You
- 4.2. Laying the Foundation for Successful Asset Allocation
- 4.3. Recognizing the Most Important Features of an Asset
- 5. Stirring the Mix: Portfolio Rebalancing
-
II. Getting Started
- 6. Laying the Foundation for Your Plan
-
7. Developing Your Investment Strategy
- 7.1. Understanding the Lifetime Cash-Flow Projection
- 7.2. Coming Up with an Outline for Your Long-Term Financial Plan
- 7.3. Putting It All Together: Making Lifetime Cash-Flow Projections
- 7.4. Testing "What If" Scenarios
- 7.5. Determining How Your Asset Allocation May Affect Your Lifetime Cash-Flow Projection
- 7.6. Documenting Your Strategy: Drafting Your Investment Policy Statement
- 8. Creating Your Allocation Plan
-
III. Building and Maintaining Your Portfolio
- 9. Buying Securities
- 10. Knowing Where to Put Your Assets: Asset Location
- 11. Monitoring Your Portfolio: Rebalancing and Other Smart Strategies
- 12. Measuring Your Results
-
IV. Going beyond the Basics
- 13. Walking to the Beat of a Different Drum: Opting for Alternative Investments
- 14. Managing Your Taxes like a Pro
- 15. Knowing When to Revise Your Plan
-
16. Finding Help When You Need It
- 16.1. Knowing the Right (and Wrong) Reasons to Hire an Advisor
- 16.2. Weighing Your Options for an Advisor
- 16.3. Asking the Right Questions
- 16.4. Understanding How Advisors Earn Their Income
-
V. The Part of Tens
- 17. Ten Asset Classes and Subclasses and Their Historical Rates of Return
-
18. Ten Common Asset Allocation Mistakes
- 18.1. Ignoring Asset Allocation in the First Place
- 18.2. Believing That Diversification Is Enough
- 18.3. Forgetting to Rebalance
- 18.4. Not Having a Long-Term Plan
- 18.5. Indulging Your Emotions
- 18.6. Paying Too Much Attention to the Financial Media
- 18.7. Chasing Performance
- 18.8. Thinking You Can Outsmart the Market
- 18.9. Ignoring Taxes
- 18.10. Disrespecting Inflation
-
19. Ten Questions to Test Your Asset Allocation Know-How
- 19.1. What's the Best Way to Get Consistently Good Investment Performance?
- 19.2. What's Better: An 8 Percent Return or a 9 Percent Return?
- 19.3. What's the Riskiest Kind of Portfolio?
- 19.4. How Much Variety Should You Include in the Asset Classes You Choose?
- 19.5. What's the Best Way to Rebalance?
- 19.6. When Should You Rebalance Your Portfolio?
- 19.7. When Should You Revisit Your Asset Allocation Plan?
- 19.8. Should You Apply Your Asset Allocation Percentages to Each of Your Investment Accounts?
- 19.9. How Do You Know How Well Your Investments Have Performed?
- 19.10. Where Can You Go for Help with Your Asset Allocation?
Product information
- Title: Asset Allocation For Dummies®
- Author(s):
- Release date: May 2009
- Publisher(s): For Dummies
- ISBN: 9780470409633
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