Practical Asset Allocation
The Meaningful Money Personal Finance Podcast
Pete Matthew
4.9 • 1.7K Ratings
🗓️ 27 July 2016
⏱️ 34 minutes
🧾️ Download transcript
Summary
Asset allocation is a subject we’ve covered at various times here on MeaningfulMoney as it is a core tenet of successful investing. But how do you apply it in real life to your investments? Is there such a thing as a ‘correct’ asset allocation? Let’s find out…
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Practical Asset Allocation
Last week we talked about risk tolerance and risk capacity, and I suggested that you should maybe get your own risk tolerance measured over at myrisktolerance.com and then conduct a couple of thought experiments to see where you might sit. That’s entirely theoretical though, and it may be the case that only once you have some skin in the game, i.e. some real money invested, that you’ll really know how you will cope with the inherent risk that comes wth investing.
But how do you apply the theoretical to the real world? Let’s try to give you a start…
In this session, you'll discover:
- What Asset Allocation is, and how it works
- The difference between Strategic and Tactical Asset Allocation, and why you should embrace one and ignore the other
- That there's no such thing as an optimal asset allocation
- Why you should start simple and build up carefully
- What kinds of funds you should actually buy to populate your asset allocation
- The off-the-shelf solution which will save you a load of work
Resources mentioned in this week's show
Risk Profiling: myrisktolerance.com
Podcast: Season 2, Episode 1 - Why Invest?
Podcast: Season 2 Episode 2 - Risk, Volatility & Timescale
Podcast: Season 2 Episode 3 - Know Yourself: Risk Tolerance & Risk Capacity Try Audible for Free
Previous Posts on Asset Allocation
Podcast: Asset Classes, or stuff you can invest in Podcast: Investment Masterclass: Asset Allocation
Videos on each asset class
Cash Gilts Corporate Bonds Shares Property Commodities Gold Hedge Funds The Rest
Free email course - Learn How To Invest
And of course, there is a full transcript available by clicking the big blue button below: TRANSCRIPT COMING SOON!
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Question: How have you set up your asset allocation?
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Transcript
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| 0:00.0 | Hi folks and welcome to the Meaningful Money podcast Season 2, Episode 4. |
| 0:04.2 | As one luger put it, all the rotten eggs in one basket. |
| 0:12.0 | This is the podcast dedicated to helping you put your finances in order. |
| 0:18.0 | My name is Pete Matthew and I'm going to share with you everything you need to know and everything you need to do to secure your financial future. I'm here to help you make |
| 0:25.6 | sense of money. Here we are once again. |
| 0:38.6 | Great to have you with me. |
| 0:40.0 | If I sound a little bit croaky, it's because it's 7.30 in the morning when I'm recording this, such as the dedication to the cause. |
| 0:46.9 | But I hope you're really well. |
| 0:48.3 | Thank you again for tuning in to the Meaningful Money podcast. |
| 0:51.4 | This season, we're looking entirely at investing and trying to take a deep |
| 0:57.0 | sort of dive into it, trying to give you everything you need to know in one sort of bunch of episodes. |
| 1:03.7 | Not quite sure how many yet, probably 10 or 12. So this is number four. So we've talked like about |
| 1:10.4 | why you should consider investing in the first place. We've talked about risk and what that means. And today we're going to be talking about asset allocation and how to apply it. This is such a big subject. It's a little bit difficult for me to sort of try and condense it into one episode. I could have spread it over two, but I want to try and keep these as sort of bite-sized as possible, and it's a good |
| 1:31.5 | experiment for me to try and condense things in such a way that it's useful. Asa allocation is a |
| 1:38.1 | subject we've covered at various times here on Meaningful Money, and it's a core tenet, really, |
| 1:43.0 | of successful investing. But how do you apply |
| 1:45.3 | it in real life to your investments? Is there such a thing as a correct asset allocation? Well, |
| 1:50.9 | let's find out. But before we do that, remember this podcast is brought to you with the help of |
| 1:55.4 | seven investment management, who are a firm of investment managers based in London. Now, they |
| 1:59.5 | specialize in multi-asset investing, |
| 2:02.4 | which brings institutional level investing techniques to ordinary people like you and me. Seven |
| 2:08.3 | I have been helping me out here on Meaningful Money, putting their name to the show, providing some |
... |
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