Help Manage Risk with Asset Allocation
Ever been stuck in the snow? If you have the luxury of four-wheel drive, when one wheel slips, you have three more opportunities for traction. Asset allocation is like a car with four-wheel drive.
With asset allocation, you divide your investments across different asset types, like stocks, bonds, and cash equivalents. These investment types respond differently to changes in the market so if one slips, others may rise or hold steady to counter potential losses.
Keep in mind that the use of asset allocation does not guarantee returns or insulate you from potential losses.
Finding the right mix
Your asset allocation strategy should be consistent with your investing style – from conservative to aggressive. The idea is to find an appropriate balance of risk vs. reward by mixing investments to suit your style and your time horizon (how long you expect your assets to remain invested). Use our easy My Investment Planner to help determine your personal strategy.
- Each year you should review your asset allocation with your Education Consultant
- Consider rebalancing your assets if you find that your current asset allocation is different from the mix that meets your goals or investing style
- Watch our video on Investment Strategies for Managing Risk
Get the help you need
Talk to one of our Education Consultants to get help and start planning to prepare for retirement.