Tchavdar Elenkov, BA Econ, CFPInsurance and Financial Advisor

Don’t put all your eggs in one basket Balancing Risk

Agenda

What is asset allocation?

Next steps

Factors to consider when choosing an asset allocation strategy

Can you pick the next winner?

What is asset allocation?

Don’t put your eggs in one basket

W H A T I S A S S E T A L L O C A T I O N ?

Allocating investments amongst different types of assets

Can you pick the winner?

No consistent asset class outperforms

C A N Y O U P I C K T H E W I N N E R ?

Which asset class is right for you?

How much you invest in each asset class depends on: Personality Financial goals Risk tolerance

C A N Y O U P I C K T H E W I N N E R ?

Where are you in the life spectrum?

C A N Y O U P I C K T H E W I N N E R ?

Young investor

Interested in maximum growth over the long-term

Interested in protecting the wealth you have worked so long and hard to accumulate

Pre to Post-retirement investor

Factors to consider

F A C T O R S T O C O N S I D E R

Consider the following factors

Time HorizonRisk ToleranceLiquidity issuesTax concernsLegal constraintsUnique circumstancesInvestment reporting

Next Steps

N E X T S T E P S

Step 1 – Visit your financial advisor

N E X T S T E P S

Step 2 – Create your own portfolio

Choose an investment with an AA strategy you can live with

OR

Create your own asset allocation portfolio

N E X T S T E P S

Step 3 – Review your investments

How much risk must I assume to achieve reasonable growth?

Is my strategy going to provide the highest after-tax returns?

Are the fund managers truly specialists in the areas that they invest?

Is the strategy congruent with my time horizon(s)?

N E X T S T E P S

Step 4 – Rebalance your portfolio

Regular portfolio rebalancing should be undertaken

N E X T S T E P S

Step 5 – Remix your portfolio

Re-run and tweak your portfolio models

N E X T S T E P S

Step 5 – Periodic reviews

To determine if changes in your desired approach are warranted

Things to remember

T H I N G S T O R E M E M B E R

Talk to your advisor…

…to determine if there is an asset allocation strategy appropriate to you

T H I N G S T O R E M E M B E R

Consider pre-packaged funds…

…for all or part of your investment portfolio

T H I N G S T O R E M E M B E R

Consider implementing a rebalancing strategy…

…or investing in asset allocation portfolios from providers that offer automatic re-balancing or re-mixing services

T H I N G S T O R E M E M B E R

…to make sure you get what you are expecting

Review your individual funds…

… to ensure that someone is “managing the managers”

T H I N G S T O R E M E M B E R

…on a regular basis to ensure it is reflective of your short term and long-term lifestyle goals

Review your investment portfolio…