Build a diversified investment portfolio
An investment portfolio is a collection of assets owned by an investor. A well-constructed portfolio balances risk and return through diversification across different asset classes, sectors, and geographic regions.
Proper portfolio construction helps manage risk while maximizing returns based on your investment goals and time horizon.
Higher risk, higher potential returns.
Young investors: 70-90%
Near retirement: 40-60%
Lower risk, steady income.
Young investors: 10-30%
Near retirement: 40-60%
Lowest risk, liquidity.
All investors: 5-10%
Alternatives: Real estate, commodities
Spread investments across stocks, bonds, real estate, and cash.
Invest across different industries (technology, healthcare, finance, etc.).
Include U.S., international developed, and emerging market investments.
Mix of large-cap, mid-cap, and small-cap stocks.
80% stocks, 15% bonds, 5% cash. Best for young investors with long time horizons.
Risk: High | Return Potential: High
60% stocks, 35% bonds, 5% cash. Balanced approach for mid-career investors.
Risk: Medium | Return Potential: Medium
30% stocks, 60% bonds, 10% cash. Preserves capital for near-retirement investors.
Risk: Low | Return Potential: Low
Adjust allocations to maintain target percentages.
Avoid emotional decisions based on short-term market movements.
Use index funds and ETFs to minimize fees.
Place tax-inefficient investments in retirement accounts.