Portfolio Management



Capital markets are composed of different types of asset classes. Asset allocation involves dividing an investment portfolio among different asset classes based on an investor's financial requirements. The right mix of asset classes in a portfolio provides an investor with the highest probability of meeting their need.

Each asset class selected has a long-term expected return over inflation, known as the 'real' return. A diversified portfolio will include U.S. and foreign common stock, real estate (REITs), basic metals, as well as different bond components.

Asset allocation is the most important investment decision an investor will make in their portfolio because it explains most of the risk and return.

Setting up your portfolio with the right asset classes is the most important first step in your quest to financial freedom and managing it is the second most important thing that you have to do.

Understand your risks tolerance

What is the right asset allocation for an investor? It depends on two issues. First, an investor should design a portfolio so that the expected return satisfies any cash-flow needs today and in the future. Second, any portfolio selected must be within an investor’s tolerance for taking investment risk.

A Winning Portfolio
1 25 US Stocks
2 25 Emerging Market Stocks
3 10 High Yield Corporate Bonds
4 10 Short Term Investment Grade Bonds
5 10 Inflation Protected Securities
6 10 Real   Estate   Investment   Trust Index
7 10 Basic Metals (gold, silver, copper, etc...)

By the way, once you set up your winning portfolio, you can use   deep in the money put options  to protect or hedge your accounts against short term volatilities in the market. Who can ask for anything else?

Our objective is to give you the tools that you need to succeed in this market and your brokers don't want you to know these stuffs.


 Course Outline