Episode Details

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - Strategic allocation is a long-term, passive strategy based on a client's policy statement, while tactical allocation involves short-term, active deviations to exploit market opportunities. - A constant ratio plan rebalances a portfolio back to its target percentages when market movements cause the allocation to drift. - A constant dollar plan maintains a specific dollar amount in an asset class, rebalancing by selling when the value exceeds the target and buying when it falls below. - The '100 minus age' rule is a simplified guideline for determining stock allocation that often appears on the exam but ignores individual client factors like risk tolerance. - A key exam distinction is the rebalancing trigger: constant ratio plans are triggered by percentage deviations, while constant dollar plans are triggered by a fixed dollar value. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep