Moderate Asset Allocation
You may want to consider this model's mix of stock, bond, and cash investments if:
- You don't need current income.
- You want solid growth with relative stability.
- You can tolerate some fluctuations but considerably less than the overall stock market.
Steps for choosing investments
Cash investments can be used for near-term expenses and emergencies. Preservation of principal may be your primary concern.
Steps to consider:
1. Maintain a year of cash.
Establish a checking or savings account with enough cash for a year's worth of expenses (including taxes) minus income from pensions, Social Security, etc.
2. Build a short-term reserve.
Consider earmarking all or part of your portfolio's cash allocation as a reserve you can tap into as needed.
- For the reserve, aim to invest one to four years’ worth of expenses in cash investments.
- If funds are not sufficient in your cash allocation, you may be able to use part of your short-term fixed income allocation for a reserve as well.
Past performance is no guarantee of future results. Example is for illustrative purposes only.
The information here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. Examples provided are for illustrative (or "informational") purposes only and are not intended to be reflective of results you can expect to achieve.