Tchavdar Elenkov, BA Econ, CFP Insurance and Financial Advisor Don’t put all your eggs in one basket Balancing Risk

Agenda  What is asset allocation?  Next steps  Factors to consider when choosing an asset allocation strategy  Can you pick the next winner?

What is asset allocation?

Don’t put your eggs in one basket W H A T I S A S S E T A L L O C A T I O N ?  Allocating investments amongst different types of assets

Can you pick the winner?

No consistent asset class outperforms C A N Y O U P I C K T H E W I N N E R ?

Which asset class is right for you?  How much you invest in each asset class depends on:  Personality  Financial goals  Risk tolerance C A N Y O U P I C K T H E W I N N E R ?

Where are you in the life spectrum? C A N Y O U P I C K T H E W I N N E R ? Young investor  Interested in maximum growth over the long-term  Interested in protecting the wealth you have worked so long and hard to accumulate Pre to Post-retirement investor

Factors to consider

F A C T O R S T O C O N S I D E R Consider the following factors Time Horizon Risk Tolerance Liquidity issues Tax concerns Legal constraints Unique circumstances Investment reporting

Next Steps

N E X T S T E P S Step 1 – Visit your financial advisor

N E X T S T E P S Step 2 – Create your own portfolio  Choose an investment with an AA strategy you can live with OR  Create your own asset allocation portfolio

N E X T S T E P S Step 3 – Review your investments  How much risk must I assume to achieve reasonable growth?  Is my strategy going to provide the highest after-tax returns?  Are the fund managers truly specialists in the areas that they invest?  Is the strategy congruent with my time horizon(s)?

N E X T S T E P S Step 4 – Rebalance your portfolio  Regular portfolio rebalancing should be undertaken

N E X T S T E P S Step 5 – Remix your portfolio  Re-run and tweak your portfolio models

N E X T S T E P S Step 5 – Periodic reviews  To determine if changes in your desired approach are warranted

Things to remember

T H I N G S T O R E M E M B E R Talk to your advisor…  …to determine if there is an asset allocation strategy appropriate to you

T H I N G S T O R E M E M B E R Consider pre-packaged funds…  …for all or part of your investment portfolio

T H I N G S T O R E M E M B E R Consider implementing a rebalancing strategy…  …or investing in asset allocation portfolios from providers that offer automatic re-balancing or re-mixing services

T H I N G S T O R E M E M B E R  …to make sure you get what you are expecting Review your individual funds…  … to ensure that someone is “managing the managers”

T H I N G S T O R E M E M B E R  …on a regular basis to ensure it is reflective of your short term and long-term lifestyle goals Review your investment portfolio…