By CHM on Dec 20, 2007 in Financial Planning, Retirement, and Now! | 4 Comments
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In Tuesday’s post I took a closer look at target retirement funds; many GenXer’s are now offered these kind of investments in company sponsored retirement plans. Of course, you can always choose to buy one for yourself in a traditional or Roth IRA, as well.
Before blindly matching up your projected retirement date with a target fund, I think it’s important to consider your personal tolerance for risk; then you can jump in head first.
Some of you may already know your tolerance for investment risk, based on past experience. If you’ve been invested over the past 7 years, you’ve seen a lot of market swings and probably have a very good idea of what you can and can not handle.
For those that aren’t as familiar, let’s explore…
Continue Reading “Matching your risk tolerance profile to target retirement funds”
By CHM on Dec 18, 2007 in Psychology Behind Financial Planning | 2 Comments
Over on Generation X Finance, Jeremy wrote a post titled What Asset Allocation Strategy Do You Use? He offered up three different allocation strategies for visitors to choose from.
The three major asset allocation strategies are:
- Strategic asset allocation. A passive buy-and-hold strategy where asset weights are set for a long period of time and only rebalanced when necessary.
- Tactical asset allocation. An active, market-timing strategy that responds to changing markets by trying to take advantage of new trends.
- Core-satellite asset allocation. This strategy divides a portfolio into a core set of holdings of a few index funds or total market holdings with a few small satellite holdings that provide additional return or diversification for the portfolio.
I commented that IMO, most investors should stick to the strategic asset allocation, which my readers know I advocate here all the time. But where I think the discussion really heated up was in the comments section.
Continue Reading “A Closer Look at Target Retirement Funds and How They May Affect Your Investment Allocation”
