Parker Financial, LLC can provide clients a customized Asset Allocation Report that evaluates the current asset mix and asset allocation for the entire portfolio, efficient frontier analysis, asset allocation considerations, and historical range of returns.
Asset Allocation is the process of aligning your risk tolerances, financial objectives and investment time horizon to your overall investment portfolio.Selecting difference asset types may reduce the risk of your overall investment portfolio.
The three common asset types (classes) are as follows: Cash or short-term investments (savings accounts, money market accounts, etc.) Fixed Income investments (CDs, bonds, etc.) Equities (domestic and foreign stock, etc.)
Each of these three asset classes can be further subdivided. For example, equities may be broken down by size (small, medium or large capitalized companies), difference sectors of the economy (technology, financial services, etc.) or be divided geographically (US, Europe, Asia, etc.)
The decision on how to allocate your investments depends on a number of factors including your investment objectives, time horizon, attitudes toward acceptable risk, desired return and tax bracket. The basic premise of asset allocation is that by diversifying your investments over a number of different assets and assets classes, you can help reduce the risk of the entire portfolio while maintaining your desired long-term return rate expectations. Over the long term, an appropriate asset allocation (what to buy) is more important than when to buy. Generally, a decline in one asset class may be offset by an increase in another.
Studies have shown selection of a portfolio asset allocation can be responsible for over 90% of a portfolio performance with market timing, security selection and other factors contributing the remaining portion. See chart.
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Disclaimer: Investment advisory services are offered through Parker Financial, LLC, a women owned independent fee only registered investment advisory firm in the state of Maryland. Custodian services are offered through Schwab Institutional a division of Charles Schwab & Co., Inc.; a non affiliated third-party. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. Any investments and strategies mentioned here may not be suitable for everyone. While every attempt is made to provide accurate information, we cannot guarantee the accuracy and completeness of this content. We do not provide legal or tax advice. Before implementing any strategy, please consult your accountant, legal counsel and/or other professional adviser. (2/6/2017).