Portfolio and Account Analysis
Chapters in this video
- 0:00 Saving Carla from a dangerously concentrated portfolio
- 1:02 Diversification: why 100 tech stocks fails the test
- 2:32 Asset allocation beats security selection every time
- 3:19 Rebalancing tax traps in non-qualified versus tax-deferred accounts
- 4:02 Concentration risk and the constraint-to-method cheat sheet
- 5:44 Standard deviation versus beta: total risk and systematic risk
- 6:23 Short-term versus long-term capital gains and the $3,000 loss rule
- 7:06 Rapid-fire exam day recap
What this video covers
- What diversification actually eliminates, and why owning 100 tech stocks is not diversified
- The difference between unsystematic (company-specific) risk and systematic (market) risk, and which one survives no matter how many holdings you add
- Why asset allocation, not security selection or market timing, is the biggest driver of long-term portfolio performance
- Strategic asset allocation versus tactical asset allocation, and which one changes with market conditions
- How rebalancing triggers taxable events in non-qualified accounts but not in tax-deferred accounts like individual retirement accounts (IRAs) or 401(k)s
- Common sources of concentration risk and the specific reduction strategies that match each client constraint
- Why standard deviation measures total risk while beta measures only systematic risk, and the $3,000 ordinary income offset rule for capital losses
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