One portfolio can have several time horizons
Money needed for near-term spending serves a different purpose from money intended for later decades or family members. Retirement does not give every dollar the same deadline.
Rather than starting with a model allocation, first map the jobs your money needs to do. Include everyday spending, occasional large expenses and longer-term goals.
Growth, liquidity and risk need to work together
A portfolio’s mix of stocks, bonds and cash should reflect your time horizon and tolerance for losses. Diversification can help manage concentration risk, but it does not eliminate the possibility of loss.
Holding several accounts or funds does not necessarily mean your investments are well diversified; they may contain overlapping holdings. Review the combined picture, including company stock and assets outside retirement accounts.
Decide how the plan will be maintained
Retirement investing is more than choosing an initial mix. Consider who will monitor it, when you will review it and what changes in your life should trigger a conversation.
A useful discussion with a professional can connect portfolio management with spending needs and clarify what ongoing service actually includes. No allocation can promise a particular retirement outcome.
Take these into your next conversation
Questions worth asking
- Which expenses will my investments need to cover?
- Where do my accounts overlap or concentrate risk?
- How much access to money do I need, and when?
- Who will review the strategy as my circumstances change?
Further reading
FINRA — Asset allocation and diversification ↗External sources are provided for further education. Their inclusion does not imply endorsement of Evermont.
This article is for general education and is not individualized investment, insurance, tax or legal advice. Your circumstances and applicable rules matter. Consult appropriately qualified professionals before making financial decisions.