SENSIBLE INVESTMENT STRATEGIES  

Sensible Investment Strategies is a free site specializing in asset allocation strategies with suitable recommendations from high-ranked 100% no-load mutual funds. In addition, you can easily find articles on various mutual fund topics, links to important independent sites and excellent glossaries -- all located in the left border.

One of the cornerstones for a successful portfolio is an appropriate strategy....one that gives your plan a clear and precise blueprint to achieve your goals. A well-defined mutual fund asset allocation strategy provides effective diversification -- i.e., the dispersion of assets over diverse and distinct fund categories to achieve: (1) specific risk/reward objectives and (2) a reduction of overall portfolio risk.

A successful asset allocation plan eliminates these pitfalls caused by haphazard fund selection:
            Inappropriate Strategy
            Over-weighted Categories
            Duplication
            Unsuitable Funds
For additional details, go to "Three Common Mistakes in Mutual Fund Investing".

Whether you are in a particular stage of asset accumulation or desire capital preservation with income - or just need a second opinion - Sensible Investment Strategies can suggest an effective plan that is tailored to fit your investment objectives and specific risk tolerance.

The first essential step in establishing a good plan is to define investment objectives -- including portfolio size, investment stage, time horizon, return objectives and risk tolerance. Go to Objectives & Risk for detailed information.

The second step is devising an appropriate strategy - including detailed allocation by fund category - that best represents your objectives and risk tolerance. Sensible Investment Strategies emphasizes specific risk/reward mutual fund allocation strategies to achieve effective diversification -- for details, go to "The Role of Risk in Mutual Fund Strategies".

Lastly, suitable high-ranked 100% no-load mutual funds are recommended to match the category allocations. Attributes of recommended funds include above-average category performance, objective and style adherence, long-tenured management and below-average operating expenses.

 Parameters for Recommended Funds 

• No front-end loads (initial sales commissions)
• No back-end loads (deferred sales charges)
• No 12b-1 fees (annual marketing fees)
• Below-average annual operating expenses
• Minimum five-year performance history
• Above average category rankings -- Morningstar rating of 4 or 5 stars

Think of your investment stage in terms of a life cycle. During your working or accumulation years, growth-oriented strategies will attain higher total returns than income-oriented strategies. As you approach retirement, possibly a balanced-oriented strategy may be more appropriate to conserve your accumulated assets. Finally, in your retirement, income and stability would most likely be your priorities, although some growth is also important to help protect against inflation. However, these are general guidelines -- your own return objectives, risk tolerance and time horizon should determine the strategy that is best for the goals you want to achieve.

All of the selections below are illustrated with conservative, moderate and aggressive risk tolerances. The primary differences for all three risk tolerances are (1) modification in basic allocations and (2) variation in fund categories.

Choose your strategy from the following -- age ranges are guidelines only:

Just Starting (ages 25-40) -- for very long-term, growth-oriented objectives

Established Earner (ages 41-55) -- for long-term, growth-oriented objectives

Soon To Retire (ages 56-65) -- for long-term, balanced oriented objectives

In Retirement (ages 65+) -- for long-term, income-oriented objectives

Intermediate and Short-Term -- for balanced or income-oriented objectives

Explore other sections for information on related topics. Have a question that is not covered in Question & Answers or elsewhere in this site?  Need customized portfolio advice? Need evaluation for your mutual fund portfolio?

Email seninvest@aol.com or telephone Jack Piazza at 630-606-6118.

 

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