Tuesday, November 8, 2016

Review your asset allocation.


The foundation of your retirement plan is your asset allocation strategy. This is the optimal mix of stocks, bonds, and cash for your portfolio.  The right mix for you depends on your specific goals, time horizon, and tolerance for risk.  Research shows more than 90% of your long-term investment returns are determined by your asset allocation. Right now is a critical time to review your asset allocation.  While your gut’s saying sell out of stocks entirely, your asset allocation might say to buy more.  Following a sound asset allocation strategy will bring discipline to your decision-making and better long-term returns. Diversify your investments and keep costs down.As the old saying goes, “don’t put all your eggs in one basket.”  Spread your investments across several different mutual funds.  Diversify by size of company through large-cap, mid-cap, and small-cap stock funds.  Get exposure to both growth and value investment styles.  And, don’t forget to include an international fund.Keep your costs down by selecting funds with lower expense ratios.