Rather than jumping out of the market and then wondering what to do next, consider making quarterly changes in your allocation based on market action.
Michael is a respected financial planner and publisher who adamantly believes that tactical asset allocation is not market timing.
Mr. Hoguet recommends holding about 2% of an overall bond allocation in emerging-market hard-currency bonds, and about 8% in emerging-market local-currency bonds.
For instance, a relatively standard target asset allocation in a bull market for a moderately aggressive investor might be 60% stocks and 40% bonds.
Investors will want to be overweight below-market beta allocation, meaning investors will continue to move out of risk assets and into high end investment grade, defensive sectors like utilities and overall net long safety versus risk assets.
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At the same time, this exercise in credit allocation (the housing market is getting some help here, too) is depriving small and medium-size businesses of a reliable flow of credit, which, in turn, is having increasingly destructive results on growth, innovation and job creation.
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Each city or market determines specific allocation amounts for locally run programs involving both home purchases and property rehabilitation.
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They are an essential part of the market pricing and allocation mechanism.
If not, the Fed should lead by example, championing a smaller Fed, a strong and stable dollar and a market-based allocation of credit, all of which would help the economy grow faster.
If the initial allocation started as 5%, even with the market volatility and risks seen in the early '90s, the portfolio allocation could have grown to being 30% or more in four years and could have easily soared to more than 50% within seven years.
In five out of the six periods during market turmoil, an allocation to gold preserved wealth by reducing the hit taken by the portfolio.
One of the principal preconditions of a free market and the optimal allocation of resources is an unlimited number of buyers and sellers such that none can influence prices.
"For almost 10 years, the cartelists carried out the most harmful anti-competitive practices, including price fixing, market sharing, customer allocation, capacity and output coordination and exchanges of commercial sensitive information", the commission said.
In fact, you can get the entire world stock market roughly in its current allocation simply by buying two exchange-traded funds (ETFs).
Michael Kitces and I took opposites sides in the market timing versus tactical asset allocation debate during a recent interview published in CFA Magazine.
In a down market, the 40% allocation to bonds could support distributions for ten years before any volatile risky (equity) assets would need to be liquidated.
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If your goal is to maintain a 40% allocation to bonds and, due to market movements, fixed income now accounts for 50% of your portfolio, changes may be required.
If a portfolio has a target of 50% in stocks and 50% in bonds and market movements result in different allocation, a rebalancing would correct this mismatch back to its 50-50 target.
The average recommended allocation has now slipped four points below the market weighting, with Daiwa the biggest seller.
One of the simplest and most effective ways to manage daily stock market volatility is to have an allocation to fixed-income.
As they approach retirement they increase the bond allocation, as a safeguard against the stock market crashing just before they need the money.
We had gone through a major change of allocation in technology and availability, and the market was really in a bit of a tailspin.
Short-termism can result in a range of corporate and financial games that may enrich management at the expense of market integrity and efficient investor capital allocation.
Those standards should serve investors and other market participants in their economic and resource allocation decisions.
With this said, it is important not to abandon longer term asset allocation strategies as a reaction to short-term market movements.
Ultimately, a mechanism for licence-holders to trade their rights on a secondary market, similar to a bond or commodity market, could lead to more efficient allocation.
That would have allowed the company to make more money, as opposed to shareholders lucky enough to get an allocation before the shares become available on the open market.
As part of a bond investing strategy one should seek to switch out of a high allocation of bonds and into stocks when the stock market reaches a capitulation phase.
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