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Lesson One: Asset Allocation is an Investment Planning Tool, not an Investment Strategy... Investment Planning takes place within the Trusts, Endowments, IRAs, and other Brokerage Accounts that come into existence as a result of, or without, Financial Planning.

Lesson Two: Asset Allocation is a planning tool that allows the Investment Manager (you, if you have not hired one) to structure the investment portfolio in a manner most likely to accomplish the goals of each specific investment portfolio AND of the investment program as a whole. Asset Allocation is the process of planning how an investment portfolio is to be divided between the two basic classes (and only these two classes) of investment securities: Equities and Fixed Income.

For investors only... and for speculators who need to invest their winnings.

Lesson One: distinction specification is an Investment Planning Tool, not an Investment Strategy... few investment professionals understand the distinction, whereas most think that Investment Planning and Financial Planning are the same thing. Financial Planning is a broader concept, and one that involves such non-investment considerations as Wills and Estates, Insurance, Budgeting, Trusts, etc. Investment Planning takes place within the Trusts, Endowments, IRAs, and other hire assets that come into existence as a result of, or without, Financial Planning.

Lesson Two: means precision is a planning tool that allows the Investment Manager (you, if you have not hired one) to structure the investment portfolio in a manner most likely to bring to fruition the goals of each specific investment portfolio AND of the investment program as a whole. glory spotting is the process of planning how an investment portfolio is to be divided betwixt and between the two homespun classes (and only these two classes) of investment securities: Equities and Fixed Income. Security sub-classes have little relevance.

Lesson Three: Equities are the riskier of the two classes of securities, but not inasmuch as of the price fluctuations that are their homespun trace out trait. They are riskier as they represent ownership in a jigger enterprise that could fail. The risk of expedient loss can be moderated or minimized in the security selection process and with a management control ardour diversification. The primary purpose for buy Equities is to sell them for premier gains, not to save them as trophies to brag practically in chat rooms. They are less risky than other, non-fixed income endeavors.

Fixed income securities are less risky they represent debt of the issuing entity, and owners have a cry for on the money to burn of the issuer that is superior to that of Equity holders and their salivating importance posture attorneys. With proper selection criteria and diversification, the risk of sterling loss is negligible and price fluctuations can be ignored except for the trading opportunities that they provide. The primary purpose of these securities is income generation, either for current consumption or for use later in life. star gains here should be taken…and bragged not far from in chat rooms!

Lesson Four: An assets placing Formula is a long-range, semi-permanent, planning decision that has literally nothing to do with market timing or hedging of any kind. It is designed to produce the integrity of resource Growth and Income that will arrive at the long-range personal (pay those bills) goals of the individual. Thus, it must not be tinkered with cause of expectations thereabouts anything, or rebalanced masterfully as things go of natural changes in the market values of one advantage station or the other. Thus, an principal form fund is an oxymoron.

Lesson Five: resource positioning is the only proven cure for inflation. If properly managed using “The Working supply Model”, it will about truly increase the level of portfolio income by more than the rate of inflation, which is a measure of the purchasing power of your dollars, not the dollar value of your purchased securities. Six figure portfolios allocated 100% to Equities are not nearly as inflation proof as those that are more balanced… see Lesson Six.

Lesson Six: In rapport to the potential of failing to keep up with inflation using an Equity Only advantage allocation, regardless of your age, greed management becomes much more of a problem. In a rising market, evidenced by more profit taking opportunities than lower priced bargains, investors tend to take positions in lower quality issues, current story stocks, newer issues, etc… just to be in there. A 30% or so Fixed Income form can be a major focus factor. How’s that for throwing cold water on an macrobiotic Wall Street maxim.

Lesson Seven: These are just some of the lessons to be learned all round ornament allocation.

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