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Portfolios 306: Getting More Aggressive

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1.
What type of bond would be the most volatile part of an aggressive portfolio?
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High-yield bond. High-yield bonds are the most volatile of these options.
2.
What's among the most significant move you can make to alter your long-term returns and volatility?
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Reducing your bond and cash investments and increasing your position in stocks. Your blend of cash, stocks, and bonds likely contributes more to your portfolio's return and volatility than what investment styles you practice, what sectors you have exposure to, and what individual securities you choose. The more of your portfolio you have in stocks and the less you have in bonds and cash, the more intense your portfolio's performance can be.
3.
To alter your foreign investments, consider _______.
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Smaller companies. As in the United States, foreign mid- and small-company stocks theoretically have a growth edge over their larger counterparts. Emerging-markets stocks are also an option for aggressive investors.
4.
Why may tilting your portfolio toward growth stocks theoretically alter its performance?
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Because companies that are growing at a decent rate should outperform companies growing at a slower rate. Over time, a stock's price follows its earnings. As a result, companies that are growing at a decent rate should outperform those companies growing at a slower rate.
5.
According to many financial professionals, what contributes the most to your portfolio's return and volatility?
Choose wisely. There is only one correct answer.
Your blend of investments. In other words, your asset allocation is what matters more than anything else.