Asset Allocation & Your Investment Plan – A Blueprint For Wealth
Many of the wealthiest people in the world owe their fortunes to different types of residual income from stocks and bonds to investment trusts, real estate, commodities and more. In this chapter were going to discuss the importance of asset allocation how you spread your assets into different types of products (from safe to speculative).
When we talk about asset allocation we refer to the various vehicles in which we invest our cash. We can split our assets into three specific classes security, buy/hold and speculative. It is advised that the largest chunk of your assets should fall into the security (approx 70%) bucket and this includes assets such as cash, ISAs, pension funds, home of residence, safe bonds and government securities. These are the safest of assets.
The next type of asset class is the buy & hold variety these tend to be longer term investments that are generally safe. Assets in this class include buy & hold stocks/mutual funds and investment real estate. This type of asset is generally solid with the stocks being of high pedigree with sound...