Asset Allocation

How Much to Invest in Stocks and Bonds

August 8, 2007

The allocation of your investments between stock and bond mutual funds is one of the most important asset allocation decisions you’ll make. Fortunately, there are some really easy to apply rules of thumb to help us make a reasonable decision. Before we get to how much to invest in stocks vs bonds, however, here are [...]

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Asset Allocation in Action–Why Bother?

August 7, 2007

Picking the right asset allocation for your situation is as important as picking specific mutual funds. Your asset allocation will determine in large part how risky your portfolio is and what returns you can reasonably expect. Over the next week, we’ll look at allocating your investments between various asset classes (e.g., stocks and bonds, large [...]

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Beginner’s Guide to Asset Allocation: Actively Managed vs. Index Mutual Funds

July 24, 2007

Question: Which is better, actively managed mutual funds or passively managed index funds? Answer: Yes. Little else will heat up a discussion among mutual fund investors than the question of whether actively managed mutual funds or index mutual funds are best. This question is not strictly a matter of asset allocation, but it’s such a [...]

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REIT–Real Estate Investment Trusts

July 14, 2007

REITs are an important asset class for a diversified portfolio of mutual fund investments. A REIT (Real Estate Investment Trust), as the name suggests, invests in real estate. This article will describe these investments, why they are an important consideration as you build your portfolio of investments, and some of the REIT mutual funds and [...]

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Beginner’s Guide to Asset Allocation–Foreign vs. Domestic Mutual Funds

July 5, 2007

I remember a time when “Made in China” stamped on a product was a novelty. Not anymore. Today, the growth of industry outside the U.S. is proceeding at a fast clip. Globalization, as many describe it, is making investments abroad more critical to a diversified portfolio than ever before. In fact, about 50% of the [...]

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Growth vs Value Mutual Funds

July 3, 2007

The last article in this series covered the market cap of funds, asking whether size matters. Today we look at the difference between growth vs value mutual funds. Value Funds: A value stock is one that is undervalued according to some measurement. It may be undervalued because it’s in an industry that is struggling. It [...]

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Large Cap vs. Mid Cap vs. Small Cap Mutual Funds

June 26, 2007

Large cap vs. mid cap vs. small cap: What’s the difference, and why does it matter to an asset allocation plan and a well diversified portfolio? These are important questions for every investor to answer. So first, let’s talk about market capitalization, and then we’ll talk about why it matters. Market capitalization (or market cap, [...]

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Stocks vs Bonds

June 23, 2007

Understanding the differences between stocks vs bonds is critical to asset allocation. The allocation between stocks and bonds is one of the most significant indicators of the risks and rewards of an investment portfolio. A stock fund buys shares of publicly traded companies, each share representing a small, fractional ownership interest in the company that [...]

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Learn How to Invest–A Guide to Asset Allocation

June 22, 2007

As I began writing the How to Make the Most of Morningstar series, it occurred to me that one of the biggest reasons to use Morningstar for investing in mutual funds is to build a diversified investment portfolio through proper asset allocation. So to put into better perspective the tools at Morningstar, this series looks [...]

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