- What are your financial goals?
- What is your time horizon?
- How much money can you afford to invest?
- How much risk are you comfortable taking?
These are just some of the key questions to consider as you work with your financial/life insurance professional to determine your right investment mix. It's important to diversify among a variety of different asset classes to help reduce the risk of investing. Major asset classes like stocks, bonds, and cash may perform differently. By diversifying your portfolio among asset classes, you can potentially offset losses in one asset category with gains in another.
In other words, “Don’t put all of your eggs in one basket.” Spreading your investment allocation across multiple asset classes may help to minimize the impact of market fluctuations – the goal of diversification.
Although asset allocation and diversification help diffuse risk, it does not guarantee future results, ensure a profit, or protect against loss. Talk with a financial/life insurance professional today to learn more about asset allocation.