What Is Asset Allocation and Why Is It Important?

With Example. Asset allocation is the process of dividing an investment portfolio among different asset classes, in order to achieve a desired level of risk and return. The three main asset classes are stocks, bonds, and cash. There are many different ways to allocate assets, but a common approach is to use a mix of … Read more

Advisor Account.

An advisor account is an investment account that is managed by a professional investment advisor. The advisor provides investment advice and makes decisions on behalf of the account holder. The main benefit of an advisor account is that it can provide access to professional investment advice and management. This can be especially helpful for investors … Read more

What Is Rebalancing a Portfolio?

Rebalancing a portfolio is the process of restoring the original asset allocation mix of a portfolio. This is done by selling some assets that have increased in value and buying others that have declined in value, in order to maintain the desired level of risk. Over time, the composition of a portfolio will change as … Read more

Churn Rate.

Churn rate is a measure of how often customers cancel or fail to renew their subscriptions to a service. A high churn rate indicates that customers are not satisfied with the service and are cancelling their subscriptions. A low churn rate indicates that customers are satisfied with the service and are renewing their subscriptions. What … Read more

80-20 Rule Definition.

The 80-20 rule definition is a investing rule of thumb that states that 80% of the return from a portfolio is generated by 20% of the holdings within that portfolio. This rule is often used by investors to help them focus their attention on the most important holdings in their portfolio. There are a few … Read more

Granular Portfolio.

A granular portfolio is one in which each security is individually selected and weighted according to its contribution to the overall portfolio objectives. The process of constructing a granular portfolio is often referred to as security selection. Granular portfolios are typically used by professional investors, such as hedge fund managers, who have the time and … Read more