Factors to Consider in Investment Strategy

Strategic Asset Allocation = Your targeted asset allocation Tactical Asset Allocation = Short-term changes to your strategic asset allocation Real Estate Investment Trust (REIT) = A company owning income-producing real estate Diversification = Spreading investments across different assets

money.msn.com/how-to-invest = A reference for portfolio building cfainstitute.org = A reference for a career in financial advice brightscope.com = A reference to compare 401(k) plans reit.com = A reference to learn more about REITs

Short Selling = A strategy devoted to profiting from the decline in a security's price Individual Investing = Investing on one's own without professional advice Asset Allocation = Deciding how to distribute investments among different asset classes Income-Producing Real Estate = Real estate properties that generate rental income

Broker/Advisor Selection = Choosing a professional to provide investment advice and execute trades Investment Policy Statement (IPS) = A document outlining investment objectives and guidelines Portfolio Performance = Evaluation of how well an investment portfolio has performed Types of Brokerage Accounts = Different account options for buying and selling securities

Asset allocation = About 90% of portfolio performance stems from this Security selection = Often thought to be more important but less impactful on portfolio performance

Broker/advisor selection = Deciding whether to manage investments yourself or hire someone else Market timing = Attempting to predict the future direction of the market

Should you manage your investments yourself or hire someone else to do it? = Investment management How should you distribute your investment funds across different asset classes? = Asset allocation

Liquidity = Ability to sell assets quickly without significant price reduction Taxes = Tax bracket affecting after-tax returns

Special circumstances = Company matching investments, stock buying restrictions, conflicts of interest Security selection = Choosing specific securities within asset classes

Asset allocation or security selection? = Determining which is more crucial for successful investing Most people's inclination regarding security selection = Common belief that may not align with research findings

Asset allocation = Deciding how to distribute investments among different asset classes Security selection = Choosing specific securities within each asset class Investment Policy Statement (IPS) = A document outlining investment goals and strategies Portfolio performance = Overall return on investment portfolio

Full-service brokers = Provide personalized investment advice and charge higher commissions Discount brokers = Offer lower-cost trades with fewer personalized services Deep-discount brokers = Provide minimal services at very low commission rates Online brokers = Also known as e-brokers, offer trading services over the internet

Crafting an Investment Policy Statement (IPS) = Define investment goals and strategies Setting up an IRA = Establish a tax-advantaged retirement account Choosing a brokerage account type = Select between full-service, discount, or deep-discount brokers Selecting a broker/advisor = Decide on the level of service and commissions needed

Bonds outperformed stocks in 2008 = Security selection had limited impact on portfolio performance during that period Skilled stock pickers might underperform bonds = Emphasizes the importance of asset allocation over security selection Stocks tend to move together = Highlights the need for diversification in asset allocation Online investing has changed the brokerage industry = Reflects the shift towards digital trading platforms and services