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Saturday, April 09, 2005

Modern Portfolio Theory

Modern Portfolio Theory has been around for a long time. It basically says that investors should diversify among asset classes because it will increase your returns while lowering risk. A perfect example of this right now is real estate. Real estate is an asset class. Alot of people(myself included) have made alot of money in real estate the last few years. I know as everyone else should, that this market will not go on forever. With modern portfolio theory, ideally investors will have some of their money in the stock market, some in real estate, some in managed futures/hedge funds, some in bonds, some in cash, and maybe some in precious metals. This type of portfolio will not have the wide swings in equity like if you were in say 100% in stocks or whatever. This type of well allocated portfolio has also been shown that it will produce better returns over time. To learn more about this just click the link at the beginning of this post or call me to discuss it. As always, my number at the office is (888)959-9955. Ask for Allan, thanks.


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