Asset Allocation

Assume you are 45 years old, want to retire in 20 years, and currently have an investment portfolio valued at $240,000 invested in technology stocks. After talking with a financial advisor, you feel you have “too many eggs in one basket” and need to diversify your investments. Based on this information, use the asset allocation method described in this chapter and the table below to diversify your investment portfolio. Then in a short paragraph explain why you chose these investments.

Solution Preview

Table 1.0 Allocation of my portfolio.

Investment Alternative

Percentage in this Category

Stocks issued by large corporations

25%

Stocks issued by Medium-Sized corporations

20%

Stocks issued by small, rapidly growing companies

25%

(247 words)