What is Asset Allocation? - MWBoone Video Library

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What is Asset Allocation?

Mwboone & Associates (Bellevue, WA), Certified Financial Planners, Wealth and Investment Management
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Every investment decision involves both risk and reward. You invest your money with the hope that you'll be rewarded with a profitable return over time. But the fact is there are few guarantees in life. Most investments are exposed to risk, a potential loss of assets.

To reduce risk, most smart investors diversify their assets. It's a strategy to help reduce vulnerability to market changes in one investment category? What's an efficient diversification strategy for you? It depends on what you're saving for, how much time you have, and how you feel about handling risk. An investment approach to pay for a child's college education may be different than saving for your retirement. The difference in your time horizon often affects your investment decisions. How you feel about assuming risk defines your "risk tolerance profile." Some investors are risk-averse and prefer a conservative approach -- others are willing to invest aggressively to reach their objectives.

Over time, your investments will grow or decline with market conditions. Your portfolio may need to be rebalanced to maintain diversification, or adjusted to reflect a change of your investment goals. Your portfolio might look like this: your assets are spread across a number of investment types, matching your risk tolerance, within your time horizon, monitored and adjusted along the way.

We'll work together with you to create an investment roadmap that's customized to help you achieve your personal goals. Those who know where they're going fare better than those who do not. If you want to know, we can show you how.

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