![]() ![]() For example, a 60/40 portfolio represents a bucket containing 60% of the overall assets that are stocks and another bucket that contains 40% of the assets that are strictly bonds. "Bucket" is a casual term that portfolio managers and investors frequently use to allude to a cluster of assets. He likes to play poker, go camping, and practice yoga, but he loves to talk economics and investment strategies even. Nobel laureate James Tobin created a widely-followed investment strategy that is commonly referred to as the "bucket approach," which entails allocating stocks between a "risky bucket" that aims to produce high returns, and a "safe bucket" that exists for the purposes of meeting liquidity or safety needs.Buckets are routinely used as asset allocation tools, where portfolio managers assemble clusters (buckets) of investments, each with different risk characteristics, in order to create an overall asset allocation mix that best suits each investor, based on their individual risk temperament and long term goals.In investment vernacular, the term "bucket" is frequently used by portfolio managers, financial advisors, and their investment clients to describe a grouping of related investment assets. ![]()
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