Thursday, February 23, 2012
PORTFOLIO CHECKUP: STEP TWO
4:18 PM | 
Posted by
pensionfinancialservices |
Financial articles may not be what you would call light reading, but many can be illuminating- especially one that we recently noted from Fidelity Investor’s Publications on “evaluating your investments and performance.” We continue today with Step 2—advice on Asset Allocation. Here are excerpts:
“Once you have a handle on your portfolio’s overall performance, you can assess your asset allocation. As a starting point, check to make sure that the target you have set for your balance of stocks and bonds matches your goals, risk tolerance and time horizon.
“As your life changes, you may want to adjust your strategy and target asset mix. For instance a young person investing for retirement may be willing to take on more risk . . . and as a result could aim to hold a greater proportion in stocks than bonds. On the other hand, an investor nearing retirement may want to protect against near-term volatility by constructing a more balanced portfolio. Similarly, a shift in income due to a job change, a new family situation such as marriage or divorce, or some other life event could require you to revisit your strategy.
“Next, ensure that you are diversified within each asset class.
“Keep in mind the risks associated with different types of holdings and remember that creating a diverse mix isn’t enough. Part of your monitoring process needs to make sure that your investments stay on track.
“When it comes to individual stocks and bonds, you may want to make sure you don’t have too many of your eggs in one basket. . . “
The next post, Step 3, deals with a review of individual holdings.
We welcome a chance to take your temperature on your asset allocation, whether it’s with us, or you are investing elsewhere. Contact Pension Parameters Financial Services, 212- 675-9360 to set up an appointment.
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