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Distribution of investors wealth among different countries and asset classes for investment purposes.
The group of securities that have similar characteristics, attributes and risk/return relationships.
Based on investors ability and willingness to take risk
Risk tolerance depends on investors current net worth, income expectations and age.
Stated as an absolute or a relative % return
Capital preservation (minimise real losses)
Capital appreciation (portfolio growth)
Current income (focus on generating income rather than capital gains)
Total return (increase portfolio value by capital gains and reinvesting current income with moderate risk exposure)
Methods of Tax Deferral
Cash Value Life Insurance
Tax Sheltered Annuities
Employer's 401(k) and 403(b) Plans
Importance of Asset Allocation
What asset classes to consider
What policy weights to assign to each eligible class
What allocation ranges are allowed based on policy weights
What specific securities to purchase for the portfolio
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