Analysis Beginner: Determining Your Asset Mix

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Choose wisely. There is only one correct answer to each question.

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1.
Why is it hard to get consistent recommendations from different online asset allocation tools?
Choose wisely. There is only one correct answer.
They all use different assumptions. They all use different assumptions about inflation rates, earnings, and possibly taxes.
2.
If youre uncomfortable taking on more risk, what can you do to improve your chances of meeting your goals?
Choose wisely. There is only one correct answer.
Invest more each month and lengthen your time horizon. Neither investing more each month nor lengthening your time horizon increases your risk. But decreasing your exposure to bonds/cash increases your possible three-month loss.
3.
You need several pieces of information about a financial goal in order to determine the asset allocation strategy to use to achieve it. Which of the following is not one of those pieces of information?
Choose wisely. There is only one correct answer.
Current investment earnings rates. These will not help you determine an asset allocation strategy. For one thing, they may be different next year.
4.
Which is NOT a limitation of online asset allocation tools?
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They dont consider your time horizon. Most online asset allocation tools take your time horizon into account. They usually dont consider your tax situation, though. And all make different assumptions about things like inflation.
5.
If you want to improve your chances of meeting your investment goal, what can you do?
Choose wisely. There is only one correct answer.
Invest more money now. Investing more will always improve your chances. So will lengthening your time horizon or becoming more aggressive with your investments.