1. What is a…. Mutual Fund Personal Trust Pension Fund
Defined contribution
Defined benefit
Life Insurance Company
Term insurance
Whole-life insurance
Endowment Fund

2. Investment Process Specify Objectives Identify Constraints
Liquidity
Investment Horizon
Regulations
Tax bracket
Risk tolerance
Risk aversion
Wealth
Job prospects
Uncertainties
Unique circumstances
Formulate Policy
Monitor and update the portfolio as needed

3. Formulate a Policy … in other words, look at “Asset Allocation”
Money Market assets
Fixed-Income securities (bonds)
Stocks
Non-U.S. stocks and Bonds
Real Estate
Precious metals and other commodities
Goal: Maximize gains while minimizing risks.

4. Risk vs. Reward High Risk Speculative Stocks High-Yield Bonds
Moderate Risk
Growth Stocks
Low-Rated Corporate Bonds
International Investments
Limited Risk
Blue Chip Stocks
High-rated corporate bonds
High-rated municipal bonds
Balanced Mutual Funds
Low Risk
Treasury Bonds and Bills
Money Market Funds
Bank CDs

5. Asset Allocation

6. Asset Allocation

7. Rebalancing????

9. W W W Links