100% Equities Strategy

AAA

DEFINITION of '100% Equities Strategy'

An investment strategy for an individual portfolio or pooled funds vehicle such as a mutual fund. Only equity securities are considered for investment, whether they be listed stocks, over-the-counter stocks, or private equity shares. A mutual fund or ETF will often state a "100% equities strategy" in its prospectus to inform potential investors of the fund's overall risk profile.


INVESTOPEDIA EXPLAINS '100% Equities Strategy'

Equities are generally considered the riskier asset class over both bonds and cash, but historical returns have been higher as well. A well diversified portfolio of all stocks can protect against individual company risk or even sector risk, but market risks will still exist that can affect the equities asset class. All-stock portfolios will perform best when the underlying economy is growing (as measured by GDP) and inflation is low to moderate, as inflation diminishes the future cash flows of equities.


RELATED TERMS
  1. Systematic Risk

    The risk inherent to the entire market or entire market segment. ...
  2. 90/10 Strategy

    An investing strategy that involves deploying 90% of one's investment ...
  3. Exchange-Traded Fund - ETF

    A security that tracks an index, a commodity or a basket of assets ...
  4. Asset Allocation

    An investment strategy that aims to balance risk and reward by ...
  5. Market Risk

    The possibility for an investor to experience losses due to factors ...
  6. Diversification

    A risk management technique that mixes a wide variety of investments ...
Related Articles
  1. Stock Basics Tutorial
    Investing Basics

    Stock Basics Tutorial

  2. Forces That Move Stock Prices
    Active Trading Fundamentals

    Forces That Move Stock Prices

  3. What Can an Investor Learn from DuckTales?
    Investing Basics

    What Can an Investor Learn from DuckTales?

  4. Payback Period
    Investing

    Payback Period

comments powered by Disqus
Hot Definitions
  1. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  2. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  3. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  4. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  5. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  6. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
Trading Center