072 - Better Investor Series: Understanding Asset Allocation

Real Personal Finance

In this episode, we dive deeper into three ways on how you should think about framing asset allocation; your ability to take risks, your willingness to take risks, and your need to take risks. Listen in to learn the fundamentals that should drive your investment decisions.

Timestamps:

• What is asset allocation [0:30]
• The four factors in your ability to take risk explained [2:18]
• How to work out investing horizons framework [3:14]
• Think of your income stability outside of investments you plan on making [7:03]
• How your need for liquidity tie into your investments’ options [8:48]
• How to prepare your portfolio to handle your plan B [9:25]
• Measuring your risk tolerance framework [11:02]
• Knowing what’s essential to you so you can figure out what you need to invest [14:39]
• Tradeoffs when your needs for your portfolio don’t align with your risk tolerance [17:37]
• Invest in both the US and international market [20:06]
• Big companies versus small companies investing [21:07]
• How to invest in bonds and not chase yield [24:21]

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