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Develop a Risk-appropriate Investment Portfolio

5/3/2014

1 Comment

 
We have provided a tool to help you assess your risk tolerance. Based on the risk assessment scores, we developed 5 model portfolios below - they are tailored to each of the 5 risk tolerance levels.
  1. Risk Averse: low risk portfolio with income exphasis
  2. Balanced Income: moderate risk blend of growth and income with income bias
  3. Balanced: moderate risk with a balance between growth and income
  4. Balanced Growth: moderately high risk blend of growth and income with growth bias
  5. Aggressive Growth: high risk focused on growth

We followed two principles when developing the model portfolios:
  • Own the entire market. We don't bet to beat the market, instead, we aim to grow with the market.
  • Minimize the costs. We use the low cost index funds to construct the entire portfolio, they are also tax efficient.

Risk-based Investment Portfolios

Asset Allocation*


Total US Stock Market Fund

Total International Stock Fund

Total Bond Market Fund
Risk 
Averse


25%


5%



70%
Balanced Income


40%


7%



53%

Balanced


55%


9%



36%
Balanced Growth


70%


11%



19%
Aggressive Growth


85%


15%



0%
* All percentage numbers here are for reference only, each investor could fine tune the specific percentage number to fit your unique situation.
In our next blog, we will discuss which low cost index funds are best fit to construct the above risk-based portfolios.
1 Comment
Male Jobs Queensland link
2/20/2021 11:48:06 am

Thank you for sharring this

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