| Imagine yourself in charge of managing a $50 | | | | consider yourself moderately aggressive, go with |
| billion portfolio of investments, with your paycheck | | | | about 50% to 60%. If you are moderately |
| (and job security) based on one thing ... | | | | conservative consider 30% to 40%. |
| performance. If you don't deliver excellent returns | | | | Let's say you want to be moderately |
| year in and year out, you're out of a job. One | | | | conservative and decide to invest 30% of your |
| really bad year, and you can kiss your future in | | | | investment assets in U.S. stocks. You diversify by |
| the investment business good-bye. | | | | investing in three different domestic stock funds. |
| Now picture your own personal financial future. If | | | | Now, what do you do with the other 70% of |
| you don't manage your retirement assets | | | | your money? |
| carefully, you could lose half of your retirement | | | | To increase safety and income, look next to bond |
| nest egg in a matter of months. How do you | | | | funds and money market funds. As a moderate |
| protect your investment portfolio, and at the | | | | conservative you might decide to put 20% in an |
| same time make good rates of return over the | | | | intermediate-term high quality bond fund, and |
| long term? You do what the successful | | | | 20% in a money market fund. You have now |
| professional money managers do ... you diversify | | | | allocated 70% of your money. |
| and maintain a balanced portfolio. | | | | What do you do with the other 30%? You |
| If you had billions under management you would | | | | diversify further. Consider international or foreign |
| need a staff of analysts, researchers etc. to sift | | | | stock funds, real estate funds, natural resources |
| through data on stocks, bonds, commodities, real | | | | funds and gold funds. These are examples of |
| estate, foreign markets and so on. As an individual | | | | mutual funds that can produce growth when the |
| investor you can maintain a diversified and fully | | | | stock market in general is performing poorly. |
| balanced portfolio the easy way by simply | | | | Once you are fully diversified, you've done about |
| investing in mutual funds. | | | | all you can do without speculating. Make sure you |
| The pros know that stocks are the primary | | | | review your portfolio periodically. Rebalance when |
| growth engine of an investment portfolio, but | | | | your percentages get out of line. Move money |
| they also know the risk involved with investing | | | | from funds that have gone beyond your allocation |
| too heavily in the U.S. stock market. So, they | | | | targets to those that have fallen. |
| invest in bonds, money market securities, real | | | | For example, if your bond fund has fallen to 15% |
| estate and other alternative investments as well. | | | | of total assets, add to it to bring it back to 20% |
| If stocks have a bad year, bonds and money | | | | (in our example). If your domestic stock funds |
| market securities can soften the blow by | | | | have grown to 35%, cut them back to 30%, |
| providing income. Alternative investments like real | | | | your original allocation in our example. |
| estate, gold, natural resources, and foreign | | | | Diversify by investing in mutual funds. These |
| investments can pick up the slack and provide | | | | investment packages offer average investors |
| growth. | | | | virtually all the investment alternatives they need |
| As an individual investor concentrate first on | | | | to get long term growth at a moderate level of |
| stock funds. What percent of your investment | | | | risk. |
| assets are you willing to allocate to U.S. stocks in | | | | Invest like a pro. Your financial future is at stake. |
| order to get growth (higher returns)? If you | | | | |