An asset-allocation model to follow

Investing » An Asset-Allocation Model To Follow

Don't be intimidated by investing. Anyone with money to invest can set up a portfolio using the tenets of modern portfolio theory.

Modern portfolio theory sounds like a complicated, math-intensive concept -- and it is. But the basic premise suggests that investors can construct a portfolio that maximizes returns for the level of risk they wish to take. Diversification between bonds and stocks reduces stock market risk. Spreading investments among various asset classes within those broad categories further reduces the dangers associated with concentrating on one business, industry or sector.

Keep your plan in shape with regular rebalancing and voila: You're investing like the pros.

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