Asset Allocation and Industry Sectors: There Are Essay

Asset Allocation and Industry Sectors:

There are several economic concepts that affect an individual's daily finances and investments such as asset allocation and industry sectors. Asset allocation is primarily described as the manner with which an individual divides his assets among various asset categories like cash, bonds, stocks, and real estate. This fundamental principle also refers to an investment strategy with which an investor can lessen risks through diversification. One of the major goals of asset allocation is that it seeks to balance risk and reward through distributing a portfolio's assets based on a person's goals, investment horizon, and risk tolerance. Notably, the process of determining which combination of assets to retain in a portfolio is usually a very personal one ("Beginner's Guide to Asset Allocation," 2009).

The other common financial term or concept is industry sector where the two words have been used interchangeably to refer to a group of companies. Generally, industry sectors can be described as group of similar businesses and firms that share common characteristics and manufacture related goods and services. As a result, financial analysts and investors use the industry sectors to compare firms against each other ("What are Industry Sectors?" n.d.). This is primarily because financial information of businesses from different sectors is meaningless.

Importance of Retirement Law and Accounts to Asset Management:

Asset management for individuals and families is a process that serves high and very high net worth for individuals or families.This is primarily because it offers information that is helpful for integrated wealth management. Asset management for individuals or families may also involve receiving advice from trustworthy and independent financial advisors in order to examine investment solutions for the Therefore, it's important for individuals and families to critically consider important factors when carry out this process.

One of the most important aspects of asset management for individuals or families is retirement law and retirement accounts. Generally, retirement planning plays a significant role in serving as a source of income in future life. During the process of asset management, individuals and families plan different sources of income for future life through retirement plans. Regardless of the importance of retirement plans, the process of doing so during asset management is difficult to perform. Therefore, retirement law and retirement accounts help in developing suitable retirement plans during asset management. Retirement law enables individuals and families to know how to go about the process, while retirement accounts are used to earmark funds that act as sources of income in future life.

Section 304 and Section 351 Exchange:

Section 304 states that the transfer of stock in one corporation to the other corporation as part of exchanging property is considered as a redemption distribution from the issuing corporation to the acquiring corporation (Holden, 1983, p.53). In order to determine whether the supposed redemption qualifies for capital treatment, the stipulated tests….....