A diversified portfolio of stocks would not contain all technology or pharmaceutical companies, for example. If there were a number of oil company stocks, they would be diversified between domestic and international companies, producers of oil and refiners of oil. They would not all be small cap or large cap. A bond portfolio would not be all triple-A-rated or all junk, but would instead be diversified throughout different maturities, credit quality, and issuers that don’t all come from the same industry. Asset allocation and diversification are somewhat related portfolio management techniques. Where they differ is that asset allocation puts set percentages of capital into various types of stocks, bonds, and cash to achieve strategic goals in regards to risk and reward. Within those allocations, we use diversification to balance the risk of one investment with the characteristics of another. So, 20% large-cap growth, 20% mid-cap growth, 30% small-cap growth, and 30% long-term bond is an asset allocation. Drill down into the “20% large-cap growth” category, and the various companies owned would come from different industries in order to maintain diversification.
- To Fiduciary or Not to Fiduciary
- This is not the GMAT
- Purchasing Power
- What the Series 65 or Series 66 Question Didn’t Say
- What’s Up with this Fiduciary Standard for Brokers Thing?
- Notes on Floating-Rate Notes – US Treasury also Issues FRNs
- Insurance Agents giving Investment Advice in the State of Tennessee
- Asset Allocation and Diversification for the Series 65 and Series 66 exams
- Don’t Make Assumptions
- Shark Tank and The Profit
- Live Online SIE & Series 6 Classes Start Soon! p0.vresp.com/I0BR7w #vr4smallbiz 22 hours ago
- Live Online Series 65 & 66 Classes Start Soon! p0.vresp.com/rzb7VR #vr4smallbiz 1 day ago
- Spring Savings: 30% Off Series Exam Material!!! p0.vresp.com/HPppEZ #vr4smallbiz 1 week ago
- Presidential Savings on ALL Series Exam Packages!!! p0.vresp.com/5aESn5 #vr4smallbiz 1 month ago
- Cyber Monday 30% off Series Exam Material!!! p0.vresp.com/XnH76X #vr4smallbiz 3 months ago