Should Your Asset Allocation Look Like Everyone Else's?

Factors such as job stability and withdrawal rates could lead you to alter your asset allocation, making your portfolio look different from your friends

Christine Benz 4 September, 2012 | 9:00AM
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For investors bewildered about how to split their portfolios amongst stocks, bonds, and cash, off-the-shelf sources of asset-allocation guidance can be a reasonable starting point. 

Yet no preset allocation or tool can possibly address the many variables that factor into an appropriate asset-allocation framework for each individual. A 62-year-old with limited investment assets and poor health who intends to retire next year will, very likely, need to invest differently than a wealthy entrepreneur with the same expected retirement date.

When setting a customised asset allocation for yourself, an advisor can be very useful. But if you're trying to sort out your asset allocation on your own, here are some of the key situations that would call for a different asset allocation than might otherwise make sense for someone with your expected retirement date.

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About Author

Christine Benz

Christine Benz  is director of personal finance at Morningstar and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances.

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