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. Forces That Move Stock Prices
    Active Trading Fundamentals

    Forces That Move Stock Prices

  2. Stock Basics Tutorial
    Investing Basics

    Stock Basics Tutorial

  3. How To Invest In Penny Stocks
    Investing Basics

    How To Invest In Penny Stocks

  4. China ETFs: Get In As China Matures
    Mutual Funds & ETFs

    China ETFs: Get In As China Matures

comments powered by Disqus
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  3. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  4. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
  5. Floating Exchange Rate

    A country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that ...
  6. Underwriting

    1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments ...
Trading Center