The stock market has fared so well over the last decade that many people are working on the assumption that it will always be up. But careful structuring can help ensure that your portfolio is, regardless of where the market goes. The essence of portfolio theory is diversification. Diversification or asset allocation is dividing your money among major classes of investments, cash, bonds, stocks, real estate and others.
Cash includes savings accounts, CDs, money market instruments, money market mutual funds, etc.
Bonds refer to debt instruments of corporations, the federal government, state and local governments, and bond mutual funds. Real estate means lots, residence, and income producing property. Other is a catchall that includes collectibles, stones and precious metals. Yield desired, risk tolerance, age, planning period, income, number and age of dependents, etc. Use the data in the table Ups and Downs to structure your portfolio.