Phoenix Finance ~The Investment Club~ “Control your $ or it will control you!” ~ Masters

Asset Allocation Components: Nana’s investment portfolio

Asset Allocation Components: YOUR investment portfolio

A Stock Market Index An index is like a class average Just because the index is up 6% in a given year, it doesn’t mean that your portfolio is up by that amount Measure your portfolio to the index – ”beat the index” Dow Jones Industrial Average – only 30 stocks S&P500 – 500 ‘large cap’ US Stocks NASDAQ – home to most US tech stocks S&P/TSX – Canada’s major index

World’s Equity Markets Emerging Markets – e.g. BRIC These are markets that will grow They will ‘catch up’ We want to have exposure to those markets (especially as young investors) 50% of the world’s stock market capitalization is concentrated in the US Canada – not significant (4%) Japan and UK at about 8% each

You must go global! Each of these countries has a weighting of 3% Canada’s weighting is 4% So you are crazy if you invest solely in Canada Would you put all your $$$ into France or Switzerland or Germany or Australia? Of course not…

Long term – markets rise! - wild swings Sometimes sellers are in charge Market dropping = BEAR market Fear? Sometimes buyers are in charge Market rising = BULL market Greed? When we look at these indices, we see: