Why We Shouldn’t Try to Predict Stock Prices A friend mentioned the other day that in November 2019, she chatted up a fortune teller who made a spectacular prediction: by the 2020 general election, the US would suffer the greatest economic downturn since the Great Depression. No visions of a dark, handsome stranger for her. The financial industry has always employed economists and investment strategists in the role Read More
What is Asset Allocation?
With most markets taking a nose dive, it’s enough to make you run for the hills. Yet you’ve heard a lot of investment professionals tell you to “Stay the course.” But what does “stay the course” actually mean? It refers to maintaining the investment strategy that you put into action before the market crash, assuming it’s the right fit for your circumstances. When someone refers to an investment strategy, they are Read More
What are Asset Classes?
In Lesson One of Asset Allocation, we learned that when investment professionals say “Stay the course”, they mean investors should maintain their investment strategy, which typically refers to the portfolio’s asset allocation or the percentage amounts allotted to certain investment categories in your portfolio. In March 2020 most asset classes lost significant value, some almost 30% and others less than a percentage Read More
What are Your Nonprofit Endowment’s Asset Allocation Tolerance and Timing?
There are two important strategies that drive how and when you rebalance your portfolio. First, the percentage tolerance around your asset class weights and second, the timing of your rebalances. We recommend employing both of these strategies to your portfolio rebalancing in order to establish discipline around what could be an emotional process. Tolerance refers to the amount of drift you’re willing to accept when Read More
