CSCNotes-Chapter16.docxVIP

? How is an Asset Mix Developed?The Asset MixCash – Pay for expenses, capitalize on opportunities, primarily for liquidity.Eg., Currency, Money market securities, CSBs, Redeemable GICs, and bonds with maturity ≤ 1yr, and all other cash equivalents.Normal long term strategic asset allocation for cash are often 5%-10%.Fixed-Income – primarily to produce income and provide safety of principal.Eg., bonds with maturity ≥ 1yr, Strip bonds, Mortgage-backed securities, Fixed-income exchange-traded funds, preferred shares, and other debt instruments. Convertible securities are NOT.Legally, preferreds a