Podcast: Asset Allocation: Location, Location, Location

Ryan Christine Coulson
2018-07-31 13:00:00.0

Understanding the basics of asset allocation can get you well on your way to constructing a portfolio that is consistent with your investment goals, risk tolerance, and time horizon.

If your employer offers a 401(k) plan, one of the decisions you need to make when enrolling is which investments to hold in your account and in what proportion. Typically, your plan will offer a variety of investment options across multiple asset categories, geographic regions, or investment styles, and while many participants default to selecting every investment option in equal amounts, a more strategic approach can have a profound impact on your future retirement savings.

Asset allocation is the method by which you select and weight assets in your investment portfolio. According to research published in the Financial Analyst’s Journal, asset allocation accounts for as much as 91.5 percent of portfolio returns.1 Getting this decision right can provide a meaningful tailwind for your investment portfolio over time.

If you’re not sure where to start, talk to a professional advisor and walk through the pros and cons of each asset class. Your advisor will help you decide between stocks and bonds, large caps and small caps, and domestic and internationally-focused investments. Unfortunately, there is no one-size-fits-all approach when it comes to building a portfolio. However, understanding the basics of asset allocation can get you well on your way to constructing a portfolio that is consistent with your investment goals, risk tolerance, and time horizon.

Subscribe to G2G Impact podcasts and learn about the latest market trends and wealth planning opportunities by searching for “The Private Wealth Management Podcast” through your preferred podcast application such as iTunes or The Podcast App, or go to private-wealth.us.cibc.com/podcasts. Topics include establishing a credit history, understanding investment risk, when to enter into a premarital agreement and many others.

Ryan Christine Coulson is a senior wealth strategist for CIBC Private Wealth Management's San Francisco office, with 14 years of industry experience. In this role, Ryan is responsible for developing integrated wealth management solutions, providing comprehensive estate and financial planning services to high net worth clients, as well as serving as a fiduciary representative for individual trusts and foundations.

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1“Determinants of Portfolio Performance II: An Update.” Brinson, Singer and Beebower, 1996.