Investing and Asset Allocation

Sometimes you spend sleepless nights worrying about which stocks to buy and which to sell, which funds to own and which to dump and whether to get into bonds.

All of these are legitimate concerns, but the greatest determinant of your success as an investor will not be your sagacity in selecting specific stocks, bonds or funds for your portfolio. No, it will be your asset allocation. That is, the way you slice up your portfolio into broad categories of, say, large-cap growth stocks and value stocks and triple A bonds and so on.

There are many opportunities available to today's investor. Taking advantage of these opportunities by strategically distributing your money in a number of different instruments can protect your portfolio and improve your chances of achieving a desired return.

It is important for investors to understand that diversification in building a balanced portfolio helps reduce risk and improve returns.

Asset allocation is yet another way to diversify. It takes advantage of the fact that when it comes to risk and reward, financial categories like stocks, bonds and money-market (cash equivalent) accounts all behave quite differently!

Stocks, for instance, offer the highest returns among those three "asset classes," but they also carry the highest risk of losses.

Bonds aren't so lucrative, but they offer a lot more stability than stocks.

Money-market returns are puny, but you'll never lose your initial investment.

An asset-allocation strategy looks at your particular goals and circumstances and determines what asset mix gives you the optimal blend of risk and reward.

Asset allocation is a process that you re-visit again and again as you continue to build your portfolio throughout your life. Learn to identify the events that can indicate a period of re-evaluation of your asset allocation!

Chances are that, over time, the value of your investments in stocks will grow more quickly than that of your investments in bonds and cash equivalents. Eventually you will likely have a larger percentage of your money invested in stocks than your original strategy recommended.

When this situation occurs, your portfolio could be exposed to more risk. To help ensure that your assets are invested appropriately, periodically rebalance your investments!

Ioannis Evangelos (Akis) Haramis
haramis@greekshares.com
http://www.greekshares.com

Ioannis Evangelos (Akis) Haramis was born in Athens, Greece in 1951. He studied in Greece, in USA and in Belgium and has been active in the stock markets since 1972. Since 2002 he is New Business Development Managing Director at an Investment Bank and the publisher of http://www.GreekShares.com

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Google News Updated : Mon, 13 Oct 2008 11:51:33 GMT European, Asian markets bounce back - The Associated Press Vancouver Sun European, Asian markets bounce back The Associated Press - 1 hour ago LONDON (AP) - European markets opened strongly Monday following Asia's lead in response to the widespread government efforts over the weekend to shore up the world's troubled financial system. The financial crisis A light at the end of the tunnel? Economist World stock markets welcome European bank rescue AFP MSN Money - New York Times - New Straits Times - Voice of America all 769 news articles Publ.Date : Mon, 13 Oct 2008 10:23:04 GMT 1.5 million G1 Android phones pre-ordered - TG Daily Product Reviews 1.5 million G1 Android phones pre-ordered TG Daily - 6 hours ago By Wolfgang Gruener Chicago (IL) - T-Mobile’s upcoming G1 may not be the best-looking iPhone rival, it may not have the most complete feature set and T-Mobile may have undersold the device at the recent launch event. Get ready for next-gen mobile InfoWorld HTC G1 Android Phone Racks up 1.5 Million Pre-orders eFluxMedia Brighthand - InformationWeek - ReadWriteWeb - ZDNet all 153 news articles Publ.Date : Mon, 13 Oct 2008 05:21:21 GMT UK government takes stake in three banks - CNN International Canada.com UK government takes stake in three banks CNN International - 32 minutes ago LONDON, England (CNN) -- The British government on Monday said it would make a multi-billion investment in three of the country's major banks to help them through the "first financial crisis of the global age. In quotes: Bank bail-out reaction BBC News TEXT-Lloyds TSB terms for acquisition of HBOS Reuters guardian.co.uk - Wall Street Journal - Bloomberg - AFP all 1,923 news articles Publ.Date : Mon, 13 Oct 2008 11:18:47 GMT Manatee dies before reaching rehab site - Boston Globe WHDH-TV Manatee dies before reaching rehab site Boston Globe - 4 hours ago By Emily Canal After a 27-hour trip to Florida, Dennis the manatee, rescued from the frigid waters of Cape Cod, died in Orlando yesterday as SeaWorld employees carted the mammal to a rehabilitation center. Video: Rescued Manatee Dies After Mass. Rescue AssociatedPress Manatee rescued off Cape Cod dies en route to Florida Sea World New York Daily News WFLA - eFluxMedia - Cape Cod Times - South Coast Today all 565 news articles Publ.Date : Mon, 13 Oct 2008 07:21:21 GMT Fantastic finishes: 5 NFL games down to the wire - Washington Post Washington Post Fantastic finishes: 5 NFL games down to the wire Washington Post - 3 hours ago Dallas Cowboys' Mat McBriar (1) has his punt blocked by Arizona Cardinals' Sean Morey as Monty Beisel (52) looks on during overtime of an NFL football game Sunday, Oct. 12, 2008 in Glendale, Ariz. Blocked punt downs Dallas San Francisco Chronicle Backups Burst Through Line and Lift Cardinals in Overtime New York Times Sports Network - FOXSports.com - Houston Chronicle - Philadelphia Inquirer all 749 news articles Publ.Date : Mon, 13 Oct 2008 08:15:50 GMT Dodgers stand up to Phillies in Game 3 win - FOXSports.com Washington Post Dodgers stand up to Phillies in Game 3 win FOXSports.com - 4 hours ago by Ken Rosenthal Ken Rosenthal has been the senior baseball writer for FOXSports.com since Aug. 2005. He appears weekly on the FSN Baseball Report and MLB on FOX. LA revitalized at Moyer's expense MLB.com Kuroda's pitch serves its purpose for Dodgers USA Today New York Times - Los Angeles Times - Boston Globe - Philadelphia Daily News all 2,467 news articles Publ.Date : Mon, 13 Oct 2008 07:00:36 GMT Forecast: Summery Sunshine Sticks Around - Washington Post Chicagoist Forecast: Summery Sunshine Sticks Around Washington Post - 2 hours ago Columbus Day will feel a lot more like Labor Day as temperatures climb to around 80 degrees. This unseasonably warm weather will continue for the next several days. Enjoy a warm, sunny Columbus Day Times Herald-Record Beautiful start to the work week The Star-Ledger - NJ.com The Capital Times - Journal and Courier - Richmond Times Dispatch - The Virginian-Pilot all 241 news articles Publ.Date : Mon, 13 Oct 2008 09:03:26 GMT Datafeeds For Blogs Amazon RSS

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