Now might be a good time to review and rebalance your investment portfolio in order to protect and grow your hard-earned money. All of your investments are subject to risk. Risk refers to the possibility that your investments could decline in value or fail to provide a return greater than the rate of inflation. Diversify The year 2000 reinforced how important it is to diversify your portfolio to minimize your risk. For example, stocks and bonds often react differently in the same economic climate.
Asset allocation means choosing investments in several asset classes.
While there is no single asset mix appropriate for all investors, most people should have some combination of stocks, bonds, and cash in their portfolio. How much you will need. When you will need it. If you don't take the time to map out these three items, it can be difficult to make sound investment choices. Think total picture Consider assets both inside and outside your retirement plan as you rebalance your portfolio.