Why Annuities And Life Insurance Should Be On Your Client’s Bucket List
January 26, 2016 by Ted Jenkin
When I started in the business in 1991, one of the biggest fundamental teachings was the concept of asset allocation.
Asset allocation is all about the notion that different asset classes offer returns that are not perfectly correlated, hence diversification reduces the overall risk in terms of the variability of returns for a given level of expected return.
Today’s world of asset allocation uses these fancy pie charts that show clients cash, corporate bonds, international bonds, government bonds, large cap stock, mid cap stock, small cap stock, international stock, emerging markets, commodities, real estate and many other types of asset classes. The idea is that all of these asset classes are supposed to act and look much like magnets. Having a balance of these asset classes means that when some areas have worse years, other categories will have better years, and the overall risk will be minimized.
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