By SIMON CONSTABLE
When you hear market strategists use the words “underweight” and “overweight,” what exactly do they mean?
Those terms tell you how a portfolio manager is investing compared with a benchmark, says Bob Stammers, director of investor education at the CFA Institute. They can apply to individual investors, too. For many small investors, a rule of thumb is to put 60% of a portfolio in stocks. More than 60% is overweight; less than that is underweight.
Weightings differ depending on goals and risk tolerance. A higher stock allocation is typical for those willing to endure swings in prices. See original story here.
Photo by Piret Ilver on Unsplash
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