The Advantages of Simple Allocation Strategies

This week’s AAII Weekly Digest highlights these “must-read” AAII articles:   Is Your Diversified Portfolio Truly Diversified? Mutual funds—and more recently, exchange-traded funds (ETFs)—have offered safety and diversification by allowing individual investors to buy shares in many companies to spread risk. It is important for investors to understand what role they play and what role…

 

The Advantages of Simple Allocation Strategies

 Investors are undoubtedly familiar with the concept of diversification, which is a fundamental idea underlying modern portfolio theory. The phrase, “Don’t put all your eggs in one basket” is one that has been familiar to investors for thousands of years. At least intuitively, it has been so since ancient Roman entrepreneurs diversified against the loss…

 

Putting the Rise in Bond Yields Into Perspective

Bond yields have suddenly found themselves in the financial headlines. Since Donald Trump became president-elect, the yield on the 10-year Treasury has risen from 1.86% on Election Day to a near-term closing high of 2.22% on Tuesday. That is nearly a half-percentage point jump in just seven days. (The closing yield was slightly higher today,…

 

The Benefits of Asset Allocation

A Chicago Tribune article by Kiplinger’s Anne Kate Smith discusses the impact of asset allocation on portfolio performance. It states that research has shown that 88% of a portfolio’s movement is attributable to asset allocation. While the article also says that research indicates that having a diversified portfolio means you may lag the market in bull…

 

Is Your Diversified Fund Portfolio Truly Diversified?

This week’s AAII Weekly Digest highlights these “must-read” AAII articles: The Top Mutual Funds Over Five Years: Health Care Remains on Top: Health care has been one of the best-performing mutual fund categories for each of the last five years. It was the top fund category in 2015 and the only category besides the technology sector…

 

Shorting: A Strategy for Profiting From Price Declines

This week’s AAII Weekly Features highlight these valuable AAII articles: Rebalancing Update: A Tiny Raise for Retirees: Even with last year’s volatility, no rebalancing was required. Low inflation caused the withdrawal amounts to increase only slightly. The Individual Investor’s Guide to Personal Tax Planning 2015: With April 15 a month away, AAII’s annual tax and…

 

The Importance of Diversification in Retirement Portfolios

This article originally appeared in the April 2015 issue of the AAII Journal. Building a retirement portfolio that won’t run out before we do is a significant challenge of the new “living longer” era. How important is diversification across asset classes to this goal? A recent analysis by Craig L. Israelsen, Ph.D., looked at various portfolios…

 

Check Your Ego at the Retirement Planning Door

In an article on GoBankingRates.com, Gina Horkey outlines ways in which your ego may be undermining your retirement goals. She highlights ways in which we could sabotaging our retirement plan, including: Unrealistic Expectations—Statistics show that you should lower your expectations and save more aggressively. According to a survey conducted by the Insured Retirement Institute, only…