Strategic asset allocation is a long-term investment strategy that sets target allocations for various asset classes and periodically rebalances the portfolio to maintain these targets. It aims to create a diversified portfolio that aligns with an investor’s risk tolerance and financial goals.

• Reduces overall portfolio risk through diversification.

• Focuses on long-term investment goals rather than short-term market fluctuations.

• Requires regular rebalancing to maintain target allocations.

Passive index-based investing offers a cost-effective and straightforward approach to building long-term wealth. By mirroring the performance of market indexes, passive investing provides broad market exposure and reduces the need for active management.

• Simplicity: These funds are easy to understand, making them appropriate for a wide range of investors. This simplicity also provides for easier, more accurate planning.

• Diversification: They offer broad market exposure, reducing the risk associated with individual stocks and providing a balanced portfolio.

• Consistent Performance: Historically, passive index funds have delivered reliable returns, often outperforming many actively managed funds over the long term.

“Low-correlation” refers to the way assets behave compared to each other. By combining assets that do not move in tandem, investors can potentially benefit from lower volatility and more consistent retrurns.

• Risk Reduction: Low-correlation assets help to mitigate the impact of market volatility, as poor performance in one asset can be offset by better performance in another.

• Improved Diversification: These assets provide a broader range of investment opportunities, reducing the reliance on any single asset class.

• Steadier Returns: By balancing different types of assets, investors can achieve a more stable and predictable performance, even during market fluctuations.

Low-cost investing focuses on minimizing fees and expenses to maximize returns. By choosing investments with lower costs, investors can keep more of their earnings and benefit from compounding over time.

• Net Returns: Lower fees mean more of your investment returns stay in your portfolio, enhancing overall growth.

• Greater Financial Security: Reducing expenses helps to build wealth more efficiently, providing a stronger financial foundation.

• Accessibility: Low-cost investments, such as index funds and ETFs, are widely available and suitable for investors with varying levels of experience and capital.

The Efficient Market Hypothesis (EMH) is a financial theory suggesting that asset prices fully reflect all available information.

• Market Efficiency: EMH posits that financial markets are efficient, meaning that prices of securities at any given time reflect all known information.

• Investment Implications: According to EMH, it is impossible to consistently achieve higher returns than the overall market through expert stock selection or market timing, as any new information is quickly incorporated into stock prices.

• Forms of EMH: There are three forms of EMH—weak, semi-strong, and strong—each differing in the type of information considered to be reflected in stock prices.