Asset Allocation For Retirement Savings

Basics: age & income & specific responsibilities in life matter in the mix of assets in one’s portfolio.

Bain’s clients’ portfolios included equities (both common and preferred) as well as fixed income securities and small amounts of cash (typically “parked” on a short term basis before being allocated to fixed income or equities). Typical portfolios were approximately 60% equities and 40% fixed income, 70% domestic and 30% international. Approximately one third of equity investments were through mutual funds. Approximately 25% of client assets were included in tax sheltered Registered Retirement Savings Plans (RRSPs). As of 1991, Bain’s clients were primarily over age 70. As of 1995, his client base had evolved to become much younger, with a median age of around 50. his clients were dominated by professionals.

Analyzing the relationships between different variables in relation to one year returns within the superannuation industry.

The concept of superannuation was introduced through the Superannuation Guarantee (SG) with the idea of managing, accumulating and growing assets of members so that once retirement arrives they can enjoy a higher standard of living without concern for a shortage of income when retirement occurs, they arrive in the form of pension, lump sums or both. It is further explained by Dawkins (1992) that our current retirement income system was weak and that there was a need to strengthen Australia’s national saving performance. He stated “Greater domestic saving will relax the current account constraint on Australia’s economic performance. It will mean that we can grow faster without relying so heavily on foreign saving and building up an

Historically, people invest their money in mutual funds as a means to generate extra income. This can be separated into either stocks or bonds, with each having their specialty in a portfolio. The following report provides an analysis of two funds, the Fidelity® Nasdaq® Composite Index Fund (FNCMX) and the Fidelity® Floating Rate High Income Fund (FFRHX). The analysis of the yearly returns of each fund from 2005-2014 will include the risk and return for investing in each with key statistics such as mean, median, standard deviation, and range for indicators of their performance. These statistics will be paired with visuals so the client can have a visual representation of what they look like. The analysis will also compare the performance

Topics that will be covered in this final portfolio project will include both retirement and nonretirement investment products. For both categories, there is what is known as overconfidence as it pertains to financial literacy along with stock market participation by many investors in ways they may be putting larger amounts of the capital at greater risk than they should be. Strategies for mitigating risk of outliving a retirement portfolio will also be presented along with tax efficient ways to withdraw funds from investment vehicles that are tax-deferred.

In this paper I will discuss and summarize three articles, “Human Capital, Asset Allocation, and Life Insurance” by Peng Chen, Roger G. Ibbotson, Moshe A. Milevsky, and Kevin X. Zhu, “Asset Allocation in a Crisis” by Brian Jacobsen, and “The Pool and the Stream” written by Susan Trammell.

In 2005, the vice president, chief investment officer, and their investment team met in order to compose a new asset allocation policy for the foundation’s investment portfolio worth $6.4 billion. One of the proposal’s suggestion was to reduce the overall exposure of the investment portfolio to domestic public equities. The proposal would also increase the allocation to absolute return strategies (with an “equitizing” and “bondization” program) and to TIPS. The new policy would slightly increase the Sharpe ratio of the foundation’s portfolio. They also needed to make a decision on a recommendation to pledge about 5% of the total value of the portfolio to Sirius V, which was the latest fund that specialized in global distressed real estate investments.

Never put all your retirement assets into one basket. Putting all your savings into one form of investment heightens the risk of losing all your money and may reduce your return on investment. Asset allocation is an integral part of managing your retirement assets. Appropriate asset allocation requires a number of factors such;

In this paper I will discuss and summarize three articles, “Human Capital, Asset Allocation, and Life Insurance” by Peng Chen, Roger G. Ibbotson, Moshe A. Milevsky, and Kevin X. Zhu, “Asset Allocation in a Crisis” by Brian Jacobsen, and “The Pool and the Stream” written by Susan Trammell.

However, Markowitz portfolio allocation theory is highly criticised, because the final portfolios are not adequately diversified. This model was applied to a South African market, so that it gives unrealistic portfolios, that are not diversified enough, as portfolio managers noticed (McLeod (1998).

We selected 5 mutual funds that have 80% of more invested in stock equity securities in the mutual fund. The 5 mutual funds all have different investment styles according to Morningstar. The investment objective defines what each mutual fund’s long term goals are. It includes things such as required return, the risk tolerance, and investment time horizon. The investment style is the different strategy used to set asset allocation of the mutual fund. It sets expectations for long term portfolio performance. For example, VTICX focuses on large blend, where HASCX focuses on small blend; meaning that they will target different portfolio asset allocations. Each fund will allocate its funds differently and in different proportions. The investment strategy is a set of rules, behaviors or procedures designed to guide an investor's selection of an investment portfolio. For example, VTICX looks into stocks that pay lower dividends and are included in the Russell 1000 Index so they can provide a tax-efficient investment return consisting of long-term capital appreciation. Behind every capital investment there is a strategy. Arithmetic mean returns are the total average of the returns for the last ten years (07-16) of

Asset Allocation- Asset allocation is an investment strategy that aims to balance risk and reward by portioning a portfolio’s assets according to an individual’s goals, risk tolerance and investment horizon. Below is Jack and Jane’s current asset allocation.

The wealth management Industry in Australia faces some major challenges that can hinder its growth in the future. Following the financial crisis, the industry has witnessed a sea change in terms of regulations, risk, increasing costs and the overall profitability of the industry. Investors are now far more demanding of their wealth managers. At a time when returns are low, assets have suffered losses and trust has been damaged, clients are far less willing to take the performance of wealth managers for granted.

In constructing your portfolio one of the most crucial steps is determining how exactly will be investing your funds. This is called asset allocation it is important because it allows us to customize and tailor the portfolio directly to your needs and wants. To get more technical, asset allocation is a strategy where the main focus is allotting a set amount of your portfolio's funds to particular assets classes. This is accomplished by look at several factors which include the asset classes themselves and how they work, your own personal goal timeline and lastly your risk tolerance.