Rule of Thirds

a: Ideal Picture Composition ~
b: Ideal Portfolio Balance

What: The "Rule of Thirds" brings balance to composition and investing. When composing a picture, cut the picture into thirds height-wise and width-wise. Never put the subject in the middle of the picture, vertically or horizontally. Money management has a similar starting point as far as I am concerned. Put 1/3 of your money in stocks, 1/3 in bonds and 1/3 in cash. After this starting point, move it around as you see fit. Stocks will can give erratic large growth, bonds will give small steady growth and cash gives liquidity. Of course, in both contexts, these rules are an ideal staring points and should be modified to get the optimal effect. The outcome: you feel alright when looking at works of art and less crappy when one of your investments blows up.

Writer: JerryStekka
Date: May 19 2010 7:20 AM

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