Asset Allocation versus "Magic triangle" Around
an optimal investment portfolio - in the specialized jargon Asset
Allocation - to reach is necessary a clear determination of the
investment objectives. The allocation and weighting of a portfolio
depend inevitably on your investment objective and the investment period
desired. With these two defaults and the consideration of its personal
financial situation one can determine now their individual point of view
within the „magic triangle". The
„magic triangle" manufactures the purchase of current yield -
risk - liquidity. The "magic" proceeds from the fact, that
these three goals can never point to a direction. Rather the investor
must decide for a direction and make thus for the other concessions. If
one is ready to incure a high risk, the possibility is given a high
current yield. Or one takes a small risk, then one must buy
appropriately one for current yield with a long investment duration. Not
forgotten one may do here again the connection of the liquidity. Because
if a majority of the money is to remain at short notice available, the
current yield cannot fail above average highly. In
order to be able to thus optimize the portfolio purposefully, first the
prepared to take risks must be determined. During the investment period
one can backclose then on the possible current yield. In the reality
however, much too often without consideration for the personal
chance/risk profile one invests. Many investors shrink from themselves
at the trouble to formulate its allocation of fortune and goals desired
clear. The longer the time interval for the planned investment is the
more important, is however this basis work.
As already John D Rockefeller said: "It is often more
intelligent to think one hour about its money than a whole month for it
to work". As
already determined, the investment period plays beside the prepared to
take risks shank the most important role. Straight ones with shares can
be attained usually higher current yields than for example with loans,
if these remain during a longer period in the portfolio. But share is
not equal to share. Each share reflects the value of the respective
enterprise on the market again and is subject thereby also to the
economic situation and economic cycles. But
also favorable opportunities, its portfolio lie exactly here by
purposeful investments in one or other direction to steer with the
extension of the European Union. Many Blue chips of the western euro
countries represent a relatively safe investment with moderate profits,
whereby large eastern European stocks function as possible money-maker,
without a too large risk to reveal. In 2004 profits on exchange of over
50 % or 100 % were not rarity at large eastern European values.
Small values manage here not outside, should be observed and
analyzed however still more purposefully and more intensively. Correctly
assigned, risk develops however values current yield-bringing also in
small portions often to the "turbo" of a Portfolio. For the
necessary provision of information there are possibilities in the age of
the internet sufficiently. Worth knowing over the European markets and
their connections and possibilities supply with also the ESI to them. Purposeful
diversification on European level can contribute besides of still far to
the minimizing the risk its Portfolios.
Which advantages itself devoted from the diversification and
which is to be considered thereby, you can reread in our other investor
information "Diversification for minimizing the risk in
portfolios". If
the investor meets his investment decisions, is apart from the necessary
information to consider and the necessary knowledge also the
psychological investor behavior. While handling profits and losses
scientists observe again and again the same errors of the investors.
Profits are however often too fast realized "celebrated",
while one does not admit oneself losses gladly. One hopes for the fact
that the price recovers again and risks so still higher losses. If
you are not safe of enough itself as investor or do not have the time to
supervise and optimize your portfolio, you do not have to do therefore
without the possibility of the share investment. Apart from unit trust
fund offer also financial service advisors as well as bank and fortune
advisors many possibilities of taking part actively in the economic
development over shares. The information projection, which these
financial experts bring into their products and consultation, you should
bring your investment objective more near. Result: current yield, risk and liquidity face each other in the structure of fortune, by clear definition the own, individual prepared to take risks shank and the investment objective are the adjustment of the portfolio particularly by the new, rising stock markets in Europe profitably and chance-rich possible. © ESI 2005 |