08/11/20

KOLEHIYO NG LUNGSOD NG LIPA

Maraouy, Lipa City

ASSET
ALLOCATION

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

1. To introduce the concept of Asset Allocation ;

2. To familiarize the students with the factors
affecting asset allocation ; and
3. To give of the importance of asset allocation

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

What is asset Allocation?

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

ASSET CLASSES :
STOCKS
BONDS
MONEY MARKET (CASH)

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

FINANCIAL GOALS and OBJECTIVES

•Buy a home
•Buy a new car
•Buy a boat
•Take a vacation
•Travel to exotic locations
•Establish an emergency fund
•Start your own business
•Fund children’s college education

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

ASSETS ALLOCATION FACTORS:

Age
Life expectancy
Financial milestones
Responsibilities and Financial
Obligations
Time Horizon

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

Compound Returns and Time horizon –

8 Percent Return
Years until Goal Investment needed Today
40 46,031
35 67,635
30 93,777
25 146,018
20 214,548
10 463,193

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

More Aggressive Investing

Compound Returns and Time horizon –
10 Percent Return
Years until Goal Investment needed Today
40 22,095
35 35,584
30 57,309
25 92,296
20 148,644
10 385,543

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

Conservative Approach
Compound Returns and Time horizon –
7 Percent Return
Years until Goal Investment needed Today
40 66,780
35 93,663
30 131,367
25 184,249
20 258,419
10 508,349

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

Financial Position
Income Sources
Expected Market Returns
Risk Tolerance

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

ADVANTAGE:
Develop and implement financial plan
Achieve optimal portfolio composition
Develop a disciplined approach to
investing and managing your money
Help increase return and take on less
risk

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

ALLOCATION vs DIVERSIFICATION

Divide investment Purchasing a

portfolio into number of securities
different asset within an asset
classes category or class to
reduce investment

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

Investment and Portfolio Management

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 08/11/20
KOLEHIYO NG LUNGSOD NG LIPA
Maraouy, Lipa City

Investment and Portfolio Management

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