Allocating assets for your retirement portfolio |
| By Barbara
Whelehan
• Bankrate.com |
|
In the 1980s, a famous
study by Gary Brinson, L. Randolph Hood and
Gilbert Beebower determined that asset allocation
explained more than 90 percent of the variability
of returns in a portfolio. By diversifying
your portfolio among various asset classes,
you effectively reduce its volatility and
risk profile.
Below are asset allocation recommendations
for various age groups provided by the Vanguard
Group, known best for its low-cost index and
exchange-traded funds. In fact, investors
can choose from among various index funds
to create a diversified portfolio if they
wish to take a passive approach to investing.
Click on your age group to see how the experts think you should
invest in the various asset classes. Of course, you must also take
into consideration your risk tolerance and adjust your holdings
accordingly.
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| Asset allocation
charts |
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