Got an Asset Allocation Strategy? You Need One


The majority of people in the world today are too busy to even think of an asset allocation strategy. They may be concerned about getting or keeping a job, losing their homes, even just putting food on the table. Sometimes, though, you need to act today to be better off tomorrow-and so asset allocation strategy is and should be important to everyone.

Assets are everything you own that has value. It may be a depreciating asset like a car, but it’s still an asset. And no matter where you are now, you can implement an asset allocation strategy to get you where you want to be-which for most of us is wealthy.

If all of your assets are the depreciating kind (meaning that they are declining in value), that is a bad asset allocation strategy-it is taking you in the opposite direction to where you want to go. It’s actually better to sell those depreciating assets to invest in appreciating ones-like the stock market, bonds, precious metals, commodities, and more.

Investing in assets that have the potential to appreciate is a start, but of course a good asset allocation strategy goes much deeper than that. You don’t want all of your assets in one type of appreciating asset class. For example, let’s say you have some money in a mutual fund that invests in stocks-and you are putting all of your savings and investment money into that mutual fund. That’s a bad asset allocation strategy. You need to diversify by also investing in other types of appreciating assets like the ones mentioned above.

To ensure that each of your current assets continues to appreciate, it is critical that on a daily basis, you keep informed about what is happening on the political, business and financial arenas both locally and world-wide. You can then anticipate what effect any changes may have on the value of each of your investments, and whether it may be prudent to sell a particular asset and re-allocate this capital.

Once you’ve taken the step of diversifying across asset classes and are keeping yourself informed of changes on the world scene, you are ready for the advanced stage of asset allocation strategy. Now, it’s time to employ what I call Geographical Diversification. It involves spreading your risk of loss across the globe.

You see, the more you take your time and invest thought into your asset allocation strategy, the better prepared-and richer-you will be when the next inevitable crisis hits. And what could be more of a motivation than to get truly, independently wealthy? The time is now to implement your own asset allocation strategy!

Max Smith is a successful Internet entrepreneur, business coach and author, specializing in income production, wealth management and international investment diversification. He is a Qualified Veterinarian and over the years he has successfully invested stocks and stock options, owned several successful businesses and has been investing in residential and commercial real estate since 1970.

Over his forty years of investing, Max has developed his Geographical Diversification [] strategy. The fundamental principle is that even during a time of global financial stress-such as we are currently witnessing with the Great Recession-there are still pockets of financial abundance.

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