BUSN380 Week 4 Threaded Discussion – Portfolio Diversification & Portfolio Risk

BUSN380 Week 4 Threaded Discussion – Portfolio Diversification & Portfolio Risk

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Class, let's begin with a word about diversification: when the term "diversified" is used, it means, specifically, that the assets in an investment portfolio are allocated to many different asset classes, rather than just one or two asset classes. Typical asset classes include: Stocks of large companies Stocks of medium-sized companies Stocks of small companies Stocks of foreign companies Bonds Cash Before we discuss how diversified the portfolios we have are (or the portfolios we wish to have would be), let's answer the basic question: why do we diversify, or allocate our money into different asset classes, at all? Vanguard Target Retirement Funds—sophisticated investing made simple
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Unformatted text preview: Consider a Vanguard Target Retirement Fund because it's: Managed for you Each fund has an asset mix that's designed for someone planning to retire in the target year. The fund gradually adjusts to become more conservative as the retirement date nearsreducing risk automatically. Broadly diversified You can get a complete portfolio in one convenient package. The fund invests in underlying funds that hold 6,000-plus U.S. stocks and bonds and 2,000-plus international stocks to help spread out risk. A great value You keep more for retirement because the fund is managed at costit costs you what it costs us to run. On average, other target retirement funds are six times more expensive.*...
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BUSN380 Week 4 Threaded Discussion – Portfolio Diversification & Portfolio Risk

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