Let's talk about the three hidden dangers of asset allocation of high net worth people: First, business owners whose corporate assets (equity) account for more than 56% of their personal assets, if they do not completely isolate their corporate assets from their family assets. Once the enterprise has risks, it will inevitably affect the quality of life of the family; Second, families with fixed assets such as real estate accounting for more than 60% of household assets have high liquidity risk and poor liquidity. Once you need cash, you need to sell the property, but when you sell the property, you will lose a lot if you encounter a trough; Third, financing with listed companies' equity pledge has a high debt ratio. Equity financing, the stock price will be discounted, once the stock price falls, forced liquidation will also cause huge losses. These three hidden dangers should be highly valued, and corresponding adjustments must be made at an appropriate time.
The asset allocation model around a happy life is as follows:
First, the asset allocation of ballast stones.
Mainly refers to cash or cash equivalent assets, such as national debt, gold, large insurance policies with high cash value, etc. Pursue the absolute safe return of the principal, and the assets that can be realized at any time without discount are completely isolated from the business risks of the enterprise. Even if the enterprise goes bankrupt, it will not affect personal and family life. The main purposes and functions of ballast assets are: to ensure the basic living needs of families 10 years of cash flow; Can have dignity and high-quality pension planning; You can have a plan to pass on wealth and happiness from generation to generation, and break the curse of not being rich for three generations.
The simple way can be to cash out some cash when the cash flow is the most abundant, or when the company's share price is high, as the family's ballast assets (large insurance policies are the best ballast assets), to solve the family's quality life (such as large cash or high current annuity insurance), retirement pension (such as large pension insurance) and basic wealth inheritance planning (such as high whole life insurance and family trust).
Second, the allocation of offensive assets
Mainly refers to stocks, funds, investment-linked insurance, corporate bonds, equity investment, etc. Its main purpose and function is to preserve and increase the value of wealth. We should seize the opportunity, seize the opportunity, and pursue higher returns under certain risks.
Third, asset allocation based on games.
This is a high-risk investment, pursuing high returns. Once the investment fails, it will also cause huge losses. Such as angel investment, artworks, collectibles, futures, foreign exchange and so on.
Finally, talk about the difficulties and challenges of asset allocation. First of all, investment is anti-human, so we should understand greed and fear. Fear when others are greedy, and dare to be greedy when others are afraid. Secondly, the timing is invalid, and you may miss those days with the biggest increase. Finally, to face the unpredictable future, after all, "black swan" and "grey rhinoceros" will coexist.
"Professional things are given to professional people!" Facing different industries, everyone can have professional ability and cognition only after long-term training in their familiar fields. Similarly, asset allocation is also a relatively professional matter.