1. Lapointe Productions Investment Basics
Identify the factors that reduce investment risk.

2. Factors that Reduce Investment Risk
Asset Allocation and Diversification
Asset allocation
= The process of spreading your assets among several different types of investments
= Diversification
Stocks
Bonds
Risk-free assets
Real-estate

3. Traditional Investment Evaluation Factors

4. Asset Allocation and Diversification
Other factors to consider:
Your age
Growth versus income
Recovery time if investments nosedive
Your investment objectives
How much can you save and invest each year?
The dollar value of your current investments
The economic outlook for the economy
Your tolerance for risk
At what point can you no longer sleep easily?
Your investment horizon
When will you need the money?
How long can your money continue to grow?

5. To get an idea on how you should diversify your portfolio
Portfolio Investing
Brokerage firms frequently construct sample portfolios for client consideration. A suggested asset allocation for a young investor is shown below.
Visit
To get an idea on how you should diversify your portfolio

6. Investment Pyramid

7. Your Role in the Investment Process
Evaluate potential investments
Monitor the value of your investments
Keep accurate records
Other factors
Seek help from personal financial planner
Consider the tax consequences of selling your investments