One of the first questions most new clients ask is about the ideal asset mix. The ideal asset mix for each portfolio will vary, depending on factors including an investor?s age, financial situation, career and risk tolerance. Establishing the asset mix for a client portfolio is as much an art as a science, and is one of the strongest determinants of projected returns. Most portfolios should include a mix of both equity and fixed income; the question is in what ratio. Another important question is whether the income portion ought to include government bonds, corporate, preferred stocks or a mix.
Portfolios that are fully invested in equity will yield the highest returns over the long term but are not appropriate for everyone. It?s important to take into account issues like risk tolerance and income needs. Including bonds in a balanced portfolio will reduce overall volatility compared to portfolios fully invested in equities. Rock Trading Inc advisors are skilled at evaluating the ideal mix for each individual.