#PortfolioRebalancing

[financestrats]

Timeless Investment Strategies for Long-term Wealth Creation

Timeless Investment Strategies The world of investment is ever-changing, with global markets continuously evolving and new innovations surfacing each day. Despite this, some specific investment strategies have stood the test of time and continue to provide individuals with a solid foundation for long-term wealth creation. This article will delve into these timeless investment principles, exploring their benefits and guiding you on how to implement them in your investment journey.

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Diversification

Diversification has been a staple in the investment world, and for a good reason. Spreading your investments across a range of asset classes and sectors ensures that you minimize your overall risk while maximizing potential returns. Learn to balance and create a well-diversified portfolio that can withstand various economic scenarios.

Dollar-Cost Averaging

Dollar-cost averaging is an investment approach that involves buying a consistent dollar amount of a particular investment on a regular schedule, regardless of the asset's price. This method reduces the impact of market fluctuations on your investments by spreading out your purchases, helping long-term investors build wealth over time.

Long-term Investing Outlook

When it comes to long-term wealth creation, adopting a long-term investment outlook is imperative. Investors who focus on long-term growth and have patience to ride out short-term fluctuations generally fare better than those who attempt to time the market or engage in speculative trading.

Dividend Reinvestment

One of the most powerful wealth creation tools is the art of reinvesting dividends. Dividend-paying stocks, when coupled with the strategy of reinvesting the dividends, can exponentially increase your investments' growth over time. Explore different dividend reinvestment strategies and the impact they can have on your overall wealth.

Regular Review and Rebalancing

Staying informed and regularly reviewing your investment portfolio allows you to identify new opportunities or make necessary adjustments to your investment strategy. Rebalancing your portfolio periodically can help maintain your target asset allocation and minimize exposure to unwanted risks.

Conclusion Timeless investment strategies provide a solid foundation for investors seeking long-term wealth creation. By adopting these principles and committing to a disciplined approach, you can minimize risks and maximize your returns. Remember, investing takes time, patience, and consistent effort, but the eventual rewards are well worth it. Embrace these timeless investment strategies, and join the ranks of successful investors who have benefited from their wisdom.

"Explore various investment strategies and optimize your portfolio." Read the full article

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Portfolio Rebalancing Strategies: 'Do You Know This Secret?

Why Advisor need portfolio rebalancing? Portfolio Rebalancing is a Game Changer idea for Financial advisors, you can call it “PRODUCT ENGEERING”, a mutual fund scheme gives same returns whether investor invest with Advisor A or Advisor B. Now the question is what extra a Advisor can do for his clients? Problem: 50% portfolio loss vanish 100% portfolio gain.

Rule No.1: Never lose money. Rule No.2: Never forget rule No.1. - Warren Buffett The major Market corrections are cyclical keep repeating in 3-4 years, every time the market corrects shapely it take portfolio in the position of 3-4 years back, all the gain disappear which was accumulated in the bull run, now the question is how to save this gain.

Solution: 100% Equity Vs. Yearly rebalanced 70/30 Equity-debt (Invested in Sensex for equity and invested in Glit fund for debt) Really, Portfolio Rebalancing Optimize Return and Reduce risk? But how? 1. Between the market rally from 2005 to 2007 the 100% Equity portfolio gave better returns but in market fall it went below the 70/30 portfolio. 2. During the 15 years the rebalanced portfolio were less volatile, after 3rd year the rebalanced portfolio never went below the 100% equity portfolio. 3. Every time the equity gained, it shift some profit to debt and when equity fall, it buy units at cheaper rates. Which Should be the right asset class mix for best returns? Equity & Debt mix is depend on the risk profile of the investor but still if the question is what asset mix can give optimized returns, here we did back testing, the case is same as above example the last 15 years returns of Sensex and gilt, rebalanced yearly. Below graphs shows that the returns from sensex and gilt fund (Asset mix in lower equity(0%/100%) to high equity mix(100%/0%) in past 15 calendar years and the value of Rs.100000 invested on 1 jan 2005 and redemption done on 30 April 2020.

Looking at the above back testing results, the most optimized returns got in 70/30 Equity/debt, the value of Rs.100000 has been reached to Rs.551864, but if advisor want to reduce more risk with little compromise with returns, opt for 60/40 asset mix. Always Remember, Investor loves stability! What are the Strategies you can follow? Periodic Rebalancing The most convenient way to rebalance a portfolio is to decide a time interval for example quarterly, Half Yearly or Yearly. Most of the advisor prefers a yearly rebalancing irrespective of market condition, in all the above examples the yearly rebalancing has been done.

Range Rebalancing Advisor can set a target percent change in the portfolio for example a portfolio is set as equity/debt 60/40, when the market rise the equity portion will increase and the ratio get changed, it may be 70/30, here advisor can set a alert on 10% change, so whenever the portfolio get change of 10% it will ask to rebalance it. How easy it is to rebalance the portfolio? Step 1: Decide Asset Allocation ratio and Re-balancing Strategy out of Fixed interval and change percent.

Step 2: Once advisor decided the equity/Debt ratio with investor and what strategies they are going to follow, after that all task has been handled by software, if advisor want to rebalance the portfolio on 5% change, the software will send a alert as the difference in the current and recommended touches 5%.

Step 3: Software will itself generate the Buy/Sell amount, you need to go to sell option and enter the amount you want to switch to other asset class, after that all you need to click on RE-BALANCE NOW Button. The switch order will be placed on BSE/NSE.

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[butasformeblog]

Trump's Appointee To Federal Reserve Resigns Over His Trading Activities At Onset Of Pandemic...

"The move comes following additional disclosures regarding trades Clarida made in February 2020, around the time when the Fed was getting ready to roll out what eventually would become its most aggressive policy tools ever, in an effort to combat the Covid crisis.Clarida’s exit comes amid heightened scrutiny over what he had described as pre-planned portfolio rebalancing on Feb. 27, 2020.

However, recent disclosures, first reported by the New York Times, showed that three days earlier, Clarida sold shares in three stock funds that he would repurchase on the 27th.

Markets dropped on Feb. 24 amid worries that the spreading coronavirus could cause substantial economic damage. On Feb. 26, Fed policymakers huddled to discuss what policy moves they might take to combat what eventually would become a full-blown pandemic.

Within weeks, the Fed would cut its benchmark interest rate to zero and institute an unprecedented array of lending and liquidity programs to help the economy and financial markets function.

Clarida’s announcement did not mention anything about the controversy, which has been a focal point of Fed criticism from Sen. Elizabeth Warren (D-Massachusetts) and some other lawmakers. Two regional Fed presidents, Eric Rosengren of Boston and Robert Kaplan of Dallas, both resigned following questions over their trading activities.

#2020 Pandemic #Federal Reserve #Trump #2020 PortfolioRebalancing #Clarida

[mymoneymattersblr-blog]

Portfolio Re-balancing- Way to manage your asset allocation and investments smartly.

Portfolio Re balancing! Do you know? by exercising portfolio re-balancing, you can save your earnings and maximize your profits. Most of investment advisors advise for portfolio re-balancing so that investor can benefit from market movements and also maintain investments as per risk profile. Re-balancing your portfolio is nothing but reviewing your asset allocation and maintain it as per your risk profile. It is important task during journey of financial planning. Download our app for Mutual fund investments For e.g. You have invested amount say one lakh. Out of which 30 % invested in debt assets and 70 % in equity. Now after some period that is after one year there will be change in your asset percent due to variable performance of debt as well as equity portfolio. Suppose your equity investment decreased due to negative returns and debt investment increased due to positive returns. This will result in increase in debt percent and it will be more than 30 % and equity investment will be less than 70 %. Invest in NJ Mars! an automated portfolio re-balancing product. So while re-balancing you have to adjust percentage of assets back to original percentage. i.e. make debt investment 30 % and equity investment 70 %. How to perform Portfolio Re balancing? With reference to above example, An investor invested one lakh rupees. As risk profile of investor is moderate, He invested 50 % in Debt and 50 % in equity. Read the full article

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[financestrats]

Long-term Investment Strategies for Growth

Long-term investment strategies are essential for individuals aiming to achieve their financial goals while maximizing returns and minimizing risks. In this comprehensive guide, we will delve into the crucial concepts related to long-term investing methods. Moreover, we will provide useful insights on how individuals can grow their portfolios steadily and securely.

1. Diversification to Achieve Stable Returns

First and foremost, a key factor in successful long-term investment is diversification. By constructing a varied portfolio that includes various types of assets such as stocks, bonds, real estate, and cash, investors can mitigate risk and stabilize returns. Consequently, achieving long-term financial objectives becomes more likely. Additionally, ensuring a balanced and diverse set of investments helps reduce widespread risks without undermining the portfolio's growth potential.

2. Benefits of Long-term Investing

Secondly, for long-term investors, it is important to focus on a distant horizon rather than being swayed by short-term market fluctuations. In this manner, they are less likely to make impetuous decisions based on temporary setbacks. Furthermore, by concentrating on long-term rewards, investors can sidestep unnecessary transaction costs often associated with hasty trading. Learn more about long-term investing strategies

3. Value Investing Strategies

Thirdly, successful long-term investment strategies often involve recognizing and capitalizing on undervalued assets. This approach, frequently referred to as "value investing," enables investors to purchase underestimated assets at bargain prices. When the market subsequently acknowledges the assets' intrinsic value, these investors can then enjoy substantial returns. However, this type of investing generally requires thorough research into a company's fundamentals, economic conditions, and various other factors influencing an asset's true worth. Discover the essentials of value investing

4. Managing emotions and biases:

Next, maintaining discipline is crucial for adopting successful long-term investing habits. In many instances, poor investment decisions stem from emotional responses rather than logical reasoning. By employing a more disciplined approach, investors can resist impulsive choices and enhance their likelihood of steady, long-term growth. Understand how to manage emotions and biases in investing

5. Rebalancing and adjusting your portfolio:

On the other hand, being disciplined should not equate to rigidity. Adapting to changing circumstances is an integral aspect of long-term investing. Both market conditions and personal situations can alter rapidly, necessitating individuals to adjust their investments accordingly. This might involve reallocating assets or identifying new investments that better align with an individual's current goals and risk tolerance. Explore portfolio rebalancing strategies

6. Adapting to changes in market conditions:

Lastly, regularly reviewing and adjusting one's portfolio is vital in sustaining long-term investment success. By closely monitoring investments and making changes in response to shifting market conditions, investors can ensure that their portfolios remain in line with their desired risk levels. This review process may entail divesting well-performing assets and acquiring underperforming ones, enabling investors to maintain their preferred risk exposure. In conclusion, employing long-term investment strategies effectively can greatly enhance the chances of achieving financial success. By developing a diverse portfolio, focusing on long-term growth, and staying adaptable to new conditions, investors can experience steady wealth accumulation over time. Additionally, through disciplined investment habits, regular portfolio reviews, and cultivating patience, individuals can navigate the inherent risks of financial markets, resulting in robust, sustained growth. Long-term Investment Strategies for Optimal Growth Find expert tips for long-term success in financial markets "Explore various investment strategies and optimize your portfolio." Read the full article

#Diversification #Long-termInvesting #ManagingEmotionsandBiases #PortfolioRebalancing #ValueInvestingStrategies

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