Managing Your Investment Assets Asset allocation is the decision of how you divide your investment portfolio between various assets. Typical asset categories include cash or short- term securities (Treasury bills, CDs, etc.), bonds (municipal bonds, corporate bonds, etc.), and equity funds or equities (stocks, stock mutual funds, etc.). The following table illustrates several model portfolios that you can use as a basis for your own investment plan, depending on such factors as your time horizon, risk tolerance, and investment philosophy. Model Portfolios and Time Horizons Risk Tolerance/Investment Philosophy 0-5 Years 6-10 Years High Risk/Aggressive 10% Cash 20% Bonds 30% Bonds 80% Equities 11+ Years 100% Equities 60% Equities Moderate Risk/Moderate 20% Cash 10% Cash 20% Bonds 40% Bonds 30% Bonds 40% Equities 60% Equities 80% Equities Low Risk/Conservative 35% Cash 20% Cash 40% Bonds 40% Bonds 10% Cash 30% Bonds 60% Equities 25% Equities 40% Equities Suppose that Christina is using an investment program to save money for a down payment on a condominium. Therefore, she will need to use her investment money within the next 3 years. Although Christina doesn't mind taking on a small amount of risk, her primary investment goal is the preservation of her investment capital Christina is investor with a time horizon of Using the model portfolios provided, what is the ide a moderate h for Christina's portfolio, based on her time horton and investment philosophy ? on aggressive a conservative Suppose that Chnstina is using an investment program to save money for a down payment on a condominium. Therefore, she will need to use her investment money within the next 3 years, Although Christina doesn't mind taking on a small amount of risk, her primary investment goal is the preservation of her investment capital, Christina investor with a time horizon of 6 to 10 years Investment philosophy Using the model portfolios provided what is the ideal asset allocation for Christina's portfolo, based on the 0 to 5 years 11 or more years If no funds are recommended to be allocated toward an asset, enter into the pumenc entry box for that asset Cashi Recommended asset allocation for Christina's portfolio Bonds: Equities: If you In general, if you have a longer time horizon and a higher risk tolerance, then a lugher percentage of your portfolio should be in are investing for a shorter time horizon, or if you have a more conservative investment philosophy, then you should invest a greater percentage of your portfolio in Suppose that Christina is using an investment program to save money for a down payment on a condominium. Therefore, she will need to use her investment money within the next 3 years. Although Christina doesn't mind taking on a small amount of risk, her primary investment goal is the preservation of her investment capital. Christinais investor with a time horizon of Using the model portfolios provided, what is the ideal asset allocation for Christina's portfolio, based on her time horizon and investment philosophy? If no funds are recommended to be allocated toward an asset, enter into the numer entry fox for that asset. Recommended asset allocation for Christina's portfolio Cash: Honds: bonds Equities 96 equities In general, if you have a longer tume horizon and higher risk tolerance, then a higher percentage of your portfolio should be in If you are investing for a shorter time bozon, or if you have a more conservative investment philosophy, then you should wives a greater percentage your portfolio Suppose that Christina is using an investment program to save money for a down payment on a condominium. Therefore, she will need investment money within the next 3 years. Although Christina doesn't mind taking on a small amount of risk, her primary investment goal is the preservation of her investment capital, Christina is investor with a time horizon of use her Using the model portfolios provided, what is the ideal asset allocation for Christina's portfolio, based on her time horizon and investment philosophy? If no funds are recommended to be allocated toward an asset, enter "o into the numeric entry box for that asset. Recommended asset allocation for Christina's portfolio Cash: % Bonds: % Equities: % bonds In general, if yos her time horizon and a higher risk tolerance, then a higher percentage of your portfolio should be in equities are investing for Jime horizon, or if you have a more conservative investment philosophy, then you should invest a greater percentage of your portfolio in WHI 1 you
