In order to understand how asset allocation
works, it helps to know more about the investment options available
to you.
The Informed
Investor's Guide
Determining Your Investment
Personality
Here are some key questions to consider:
How much risk are you comfortable taking?
How aggressively do you want to pursue investment
growth? How willing are you to tolerate the market's
ups and downs? Your answers to these questions also
depend on the amount of time you have to invest and
your financial situation.
What are your investment goals?
Are you planning ahead for retirement? Preparing to
buy a home? Are you thinking about your children's
future college costs? Your financial needs and goals are
key to identifying the most appropriate investment
options for you to consider.
How much money can you afford to invest?
How stable is your job and personal financial situation?
How much investment risk can you afford to take?
Do you expect things to change over time?
How much time do you have to let your investments grow?
Keep in mind that long-term investments help provide
you the opportunity to ride out market swings and let
your earnings grow. The more time you have before
you need your money, the more risk you may be able
to assume in your investment portfolio.
