Strategic Asset Allocation

STRATEGICIMIEATION ALLOCATION Building a successful investment portfolio that is for the most part on "auto-pilot" takes time and more than anything STRATEGIC ASSET ALLOCATION. what is Strategic Asset Allocation (SAA)? SAA is the strategic division of your investment funds among a number of core asset classes. This diversification strategy aims to reduce the overall risk of your investment portfolio. Asset Class: a group of assets that have similar characteristics. why is SAA important? Since each asset class has its own Example: Investment in Shares is more characteristics there are different degrees of RISK associated to each asset class. risky than investment in Cash. In the investing world, if one asset goes down another asset usually goes up. HEDGING: Hedging involves protecting one asset by buying or selling another uncorrelated asset. How should I apply SAA to my investment portfolio? Every investor has his or her own tolerance towards investment risk.Some investors are a bit more daring and some are bit more conservative. There is nothing wrong with this. For each level of RISK TOLERANCE a certain Strategic Asset Allocation for an investment portfolio needs to be detemined. Example SAA's Conservative Investor 6 Cash O Property 60% 10% 5% 10% % Fixed Interest 15% Equities Commodities Balanced Investor Aggressive Investor 10% 5% 45% 30% 15% 5% 20% 25% 50% Strategic Asset Allocation is not concrete. It is ever changing and custom for each investor as every investor has different goals and personal circumstances. All investors should speak with a Financial Planner or Investment Advis- er who will accurately determine your Strategic Asset Allocation. Find a qualified and experienced professional to help determine your Strategic Asset Allocation on: M EA0 PrOAdviser.com.au Get Quotes & Contact Professional Advisers. Disclaimer: This infographic is provided for information purposes only and is not intended to provide commercial, financial, investment, accounting, tax or legal advice. It is provided to you for your personal use only. Designed BY: C Sources: JP Morgan, Goldman Sachs, The SMSF Review, John Hancock COSMO IN F O SY S Investments