Getting Some Help with Asset Allocation

Getting Some Help with Asset Allocation

Asset allocation is very important, and sometimes the slightest change can make a big difference. There are principles that you can use as guidelines when determining and evaluating how you want to allocate your assets or make changes to them. So, how about a little advice from a reputable source to help you out? Don't worry, there's no insider trading going on here, just Quicken's Asset Allocation Guide, which has some great tips. This guide has some very helpful information about assets and asset classes, how to go about allocating your assets, what an ideal portfolio looks like, monitoring your assets, and rebalancing your portfolio. In addition, this guide should be able to answer some of your questions about risks, how to reach your goals, finding a reputable financial advisor, and much more.

Get Help with Asset Allocation

From the account bar, click Investing Center.

Click the Analysis tab.

Click Show Allocation Guide or you can click the Asset Allocation Guide link in the Analysis Tools box.

The guide starts with some basic information about assets and a pie chart view of your current asset allocations. For more information about asset classes, click What Are Asset Classes and Why Should I Use Them?

To proceed to the next page of the guide, click Next: How Do I Update Asset Classes? You can also use the menu on the left to move through the guide.

Review the information about updating asset classes and common questions. If you want to download the latest classes, click Go Online and Update Asset Classes. Be sure you are connected to the Internet before proceeding.

Select the securities for which you want asset class information, and then click Update Now to download the information.

To proceed, click Next: What Should My Asset Allocation Be?

For Your Information

To get additional information about downloading asset classes, click the Common Questions About Downloading Asset Classes link.

Explore the links to get more information on a subject, or to set up or change information about your allocations, such as your target allocation.

Continue to review all the asset allocation information and click the Next: Be Smart About Your Target Allocation link to move to each new page.

When you reach the last window (titled What Is Rebalancing?), review the steps you need to take to rebalance your portfolio and click the links to get additional information.

See Also

See "Determining Whether You Need to Rebalance Your Portfolio" on page 305 for more information on rebalancing your portfolio.

When you are finished, close the window.

Estimating Capital Gains

If you sell an investment and the selling price exceeds the purchase price, that investment produces a profit for you. This is known as capital gain. Quicken provides a feature to help you determine what your capital gain potential is, using your existing investments. This feature is called the Capital Gains Estimator. Estimating your capital gains helps you determine whether it would be advantageous to sell an investment and what tax liability you could encounter. You can access the Capital Gains Estimator from the Investment and Tax menus, from the Analysis tab in the Investing Center, or from the Portfolio Analyzer. For the purposes of this task, you will be accessing it from the Analysis tab.

Get Started

From the account bar, click Investing Center.

Click the Analysis tab.

Click Capital Gains Estimator.

See Also

See Chapter 12, "Managing Your Tax Information," on page 325, for information on determining tax liabilities and setting up your tax information using the Tax Planner.

Review the Welcome page and click Let's Get Started to proceed.

Did You Know?

You can use the menu to move through the Capital Gains Estimator. If you already know your way around this feature or you prefer to navigate it by using the menu, click the menu options on the left side of the window to move through or go to a specific place in the Capital Gains Estimator. If you have saved scenarios you are working with, click a scenario under the Scenarios section to go directly to it.

Set Up a Scenario

Select a scenario and click Next. You can set up as many as three scenarios to compare and contrast situations. But you have to create the scenarios one at a time.

Select the investments you want to include by clicking in the column next to the investment name. A green check mark means the investment is selected. Then click Next.

Your estimated taxes are determined using the information you have entered into Quicken about your investments and tax information. If you have not already set up your tax information, you can do so now.

From the Federal Tax Rates section, if you're sure of your federal tax rate, select it from the list. Otherwise, use the rate that Quicken has selected for you.

In the State Tax Rates section, type your state tax rate. If you are unsure of what it is, click How Do I Find My State Tax? to get information on how to determine the rate.

Click Next.

Select Use Tax Planner Values to use losses from previous years. The figures are automatically updated. Or select Enter Different Values to type the figures yourself. Then click Next.

Did You Know?

There are limits for the losses you can claim. You can claim up to $3,000 or $1,500 if you are married and file separately above any capital gains.

Estimate Capital Gains

Type the amount you would like to make on the sale. This does not have to be an exact figure. You can change it if it ends up not meeting your goal.

Select a goal.

Click Search. Quicken searches your investments and locates securities that you can sell to meet your goal.

Click View Results.

Select the security or lot that you are thinking of selling. The number of shares and selling price automatically update in the Proposed Sales table, based on the security or lot you select.

Click in Shares to Sell or Sale Price to change the figures, if needed.

Any losses or gains are listed in the Taxable Gains from Proposed Sales table.

The potential total gross sales and total estimated taxes or refund due are calculated and provided toward the bottom of the window.

Did You Know?

You can compare taxes before and after sales. To see what your taxes would be before and after you sell an investment, click the links under Detailed Calculations at the bottom of the window.

You can go back through this scenario and make changes or set up another scenario to compare to this one by repeating the steps in the Set Up a Scenario and Estimate Capital Gains tasks. However, be sure to select the next scenario (for example, Scenario B).

When you are finished, close the Capital Gains Estimator window.