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Portfolios 501: Why Bother with Investment Theory?

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1.
What practice is related to tax planning?
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Asset location.
2.
What is the gist of the bucketing approach to retirement allocation?
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You segment your portfolio based on when you expect to need your money. Segmentation is done in order to fund several years of retirement.
3.
In the bucketing approach to retirement allocation, where would funds for the distant future be placed?
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In bonds and stocks. Putting that money in stocks and bonds will give it some room to grow as it awaits eventual use.
4.
Favoring smaller companies over larger ones is an example of ______.
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Factor investing.
5.
What investment theory says that you can limit your volatility by spreading your risk among different types of investments?
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Modern Portfolio Theory.