Phoenix Finance ~The Investment Club~

“Control your $ or it will control you!” ~ Masters

Asset Allocation Components: Nana’s investment portfolio

Nana's Investment Portfolio

EquitiesFixed IncomeCash

Asset Allocation Components: YOUR investment portfolio

Your Investment Portfolio

EquitiesFixed IncomeCash

A Stock Market Index

• An index is like a class average• Just because the index is up 6%

in a given year, it doesn’t mean that your portfolio is up by that amount

• Measure your portfolio to the index – ”beat the index”

Dow Jones Industrial Average – only 30 stocks

S&P500 – 500 ‘large cap’ US Stocks

NASDAQ – home to most US tech stocks

S&P/TSX – Canada’s major index

World’s Equity Markets

• Emerging Markets – e.g. BRIC• These are markets that will grow• They will ‘catch up’• We want to have exposure to

those markets (especially as young investors)

50% of the world’s stock market capitalization is concentrated in the US

Canada – not significant (4%)

Japan and UK at about 8% each

You must go global!

• Each of these countries has a weighting of 3%

• Canada’s weighting is 4%• So you are crazy if you invest

solely in Canada

Would you put all your $$$ into France or Switzerland or Germany or Australia?

Of course not…

Long term – markets rise!

• - wild swings• Sometimes sellers are in charge• Market dropping = BEAR market• Fear?

• Sometimes buyers are in charge• Market rising = BULL market• Greed?

When we look at these indices, we see: