How to Invest 2012 – Asset Allocation

 

Many investors wonder where to invest now but they do not consider how to invest – the basics of investing. Where to invest in 2012 is not just a strategic decision of how to choose the best funds but most importantly one of asset allocation.

Asset Allocation Beats Investment Selection

Consider this: If you choose the best stock mutual funds for the year, you could still have lower returns than the person who chooses an average bond mutual fund. How so? If stocks as a whole have a terrible year and bonds as a whole have a great year, your gift for selecting stock funds is relatively useless because mediocre bonds beat even the best stocks. This point underscores the value of asset allocation. Selecting investments is important but asset allocation has a greater overall impact on the total return of your investment portfolio.

via How to Invest 2012 – Asset Allocation.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s