Risk-tolerant investors may have as much as 80 percent of their holdings in stock, while more conservative investors may keep it closer to 60 percent. Within the equity portion of a portfolio, investors should strive for variety in several ways, Kinnel said. The idea is to spread your holdings across industries, as well as across companies of different sizes, companies with different growth prospects and companies spread around the globe. This may sound like a stodgy approach that will yield less-robust rewards than chasing highfliers, such as tech stocks, but recent research suggests otherwise. Another study by T. Rowe Price Associates indicated that a diversified equity portfolio performed pretty much on par with more specialized portfolios over the last 20 years, generally with less risk.
Investors are more likely to remain invested.
But this is virtually impossible, experts say. For now, investors whose portfolios are overloaded with technology stocks and large-company growth stocks may want to broaden the mix, advisers said. Investors can do this either by investing new money in other types of investments, which is the most common approach, or by selling some holdings and redirecting the money. The latter approach may result in a capital-gains tax bill if the investments were profitable and are in a taxable account. A good conservative move now, a number of advisers say, is to direct some investment cash into government debt securities.