Learning the basics of investing can help you become a better investor — and can lead to smarter choices.
Your investment choices are divided into three general asset classes — stocks, bonds and cash alternatives. Asset allocation simply means choosing from these asset classes to create an investment portfolio that matches both your time frame and risk tolerance, ranging from conservative to aggressive.
Mixing your investments among the different types of asset classes might help account for the long-term ups and downs of the market. Consider selecting a variety of funds from each class.
Over time, your portfolio may become too conservative or aggressive because of market conditions, your investment needs or your investing time frame. Rebalancing is simply adjusting your asset allocation to align with your evolving investment strategy. See if your plan offers an automatic rebalancing option that allows you to select a rebalancing frequency and that adjusts your account for you.
This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.