While the interest income is generally tax-exempt, any capital gains distributed are taxable to the investor. Income for some investors may be subject to the federal alternative minimum tax (AMT). Footnote 2 Diversification, asset allocation and rebalancing do not ensure a profit or protect ...
Rebalancing a long-term portfolio is an important step toward maintaining a predetermined desired asset allocation to both mitigate risk and capture opportunities. It also ensures alignment with investment objectives and often results in optimizing returns over time. "Rebalancing may seem counterintuitive ...
Everyone's investment needs are unique. Whether your goal is maximizing growth, generating income, managing risk, or other objectives, you need to create a plan — and stick with it. As Yogi Berra once said: “If you don't know where you're going, you'll end up somewhere else. ...
Keep in mind how this investment may fit into your investing plan and asset allocation strategy, and make sure it aligns with your investment goals, risk tolerance, and time horizon. 3. Buy the ETF using the ticker A "ticker" is the short letter code associated with a given ETF—a ...
While not a traditional investment, reducing credit card debt is an investment in yourself. The interest on credit cards usually surpasses the stock market’s rate of return, making it financially advantageous to pay off such debts early. You could also consider putting your refund into a Health...
Variable annuities do not offer fixed rates of return. The performance of these annuities is directly tied to the market returns of the investment sub-accounts selected. Think of a sub-account as individual stocks or mutual funds. Their value will fluctuate based upon current market conditions, ...
The first step towards a good investment includes the expectations of the investors, the investor’s risk tolerance, and the time horizon. The second step includes asset allocations. After the evaluation of the above-stated parameters, asset allocation is done, which means the division of theinves...
Return on Investment (ROI) is a widely used financial metric that helps investors and businesses measure the profitability or efficiency of an investment. ROI represents the ratio of thenet profitearned from an investment to its initial cost, allowing for quick comparison across different investments...
Asset allocation is how investors divide their portfolios among different assets that might include equities, fixed-income assets, and cash and its equivalents. Investors ordinarily aim to balance risks and rewards based on financial goals, risk tolerance, and the investment horizon. Key Takeaways Ass...
The greater returns offered by equities could be moved into the fixed income allocation over time. How Did Liability-Driven Investing Start? Liability-driven investing goes back to the day when defined-benefit pension plans were in abundance and companies had to meet their financial guarantees to...