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Here are the different types of investments you may want to combine to help build your diversified portfolio. As you can see, the longer you have to invest and the better you can stomach ups and downs, the more heavily you may want to weight your choices toward stock investments.
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| Stability of Principal |
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Bonds |
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Asset Allocation |
- Highest relative risk
- Style of foreign stock, world stock
- Investment in stocks of non-US companies; stocks of US companies and the developed world; securities of developing countries
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- Conservative to moderate to aggressive relative risk rating
- Objective of income; growth of income
- Investment in junk bonds, international bonds, corporate bonds, government bonds
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- Blended risk based, adjusted performance
- Objective of long-term growth, growth and income
- Investment in aggressive stocks, international stocks, large-company stocks, government bonds, foreign bonds, or money markets
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| Balanced |
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Large Cap Value |
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Large Cap Growth |
- Moderate relative risk
- Objective to 'balance' growth of principal and current income
- Style of 'domestic hybrid'
- Investment in combination of stocks and bonds
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- Moderate relative risk
- Objective of long-term growth
- Style of value or blend
- Investment in stocks of larger, mature companies
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- Moderate to aggressive relative risk
- Objective of long-term growth of capital
- Style of growth or blend
- Investment in stocks of larger US companies
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| Small/Mid/Specialty |
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Global/International |
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- Highest relative risk of "agressive"
- Objective of capital appreciation
- Style of growth, value or "blend"
- Investment in stocks of small and medium-sized companies
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- Highest relative risk rating of "aggressive"
- Objective of greater diversification
- Style of foreign stock; global funds style of world stock
- Investment in stocks of companies outside of US
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