The Importance of Asset Allocation
Investment success is the result of taking the
long - term view. Don't assume that investment
success is right around the corner - it's not.
Think of investment success as a destination
far off on the horizon and you'll be better
off. Even the experts agree that trying to "time
the market" by frequently moving your money
from one investment to another rarely, if ever,
works. Taking the long?term view will almost
always lead to the kind of investment return
you're seeking.
It's also important to diversify - in other words - don't put all your investment eggs in one basket. This is known as "asset allocation." Asset allocation is the act of diversifying your money between equities (stocks) and fixed?income investments (bonds). Most experts agree that the general rule of thumb is to have more money in stocks when you are younger, and to slowly shift your money, over time, to a point where you have more money in fixed?income investments as you get older.
That's why it's important to select an investment option that best reflects your goals and the number of years you have until you reach retirement. There was a time when many people felt that after retiring, they should get out of stocks altogether. Times have changed, though, and almost all experts will tell you to maintain some type of position in the stock market even after retirement.
Since it is not uncommon for people to live 15, 20 or even 30 years after retirement, setting your asset allocation becomes an even more important decision.
The articles and opinions
in this publication are for general information
only and are not intended to provide specific
advice or recommendations for any individual.
