What Assets “Count” as Part of Your Total Investment Portfolio?

Howard and Thelma Morrison were recently married. They are both in their early 30s, and each has brought valuable assets into their marriage. Now, they are in the process of consolidating them. At the same time, they are starting to take a serious look at setting up an investment plan. Neither had really given much…


Tailoring Your Allocation to the Stage You’re in With Life Cycle Funds

In an effort to make financial life easier, the concept of a “life cycle” mutual fund was born. The idea was to offer specific asset allocations and investment selections for specific investment objectives—all bundled up in one fund. And some companies provide these kinds of funds in their 401(k) plan offerings. Today, life cycle mutual…


Picking the Right Tax Pocket for Your Assets

One big advantage of a 401(k) plan is that it is tax-advantaged—it helps minimize the amount of money Uncle Sam can grab from your pockets in the form of taxes.
But the best way to limit Uncle Sam’s reach is to make sure you are putting the right assets in the right pocket. In this instance, the pockets are either taxable savings accounts or tax-deferred 401(k) accounts.
The decision as to which account—taxable or tax-deferred—will hold your stock assets and which will hold your fixed-income assets while attaining your desired asset allocation is often referred to as the “asset location” decision. If you are just starting out and have savings only in your 401(k) plan, the decision is relatively easy.
But sooner or later you will be saving in both taxable and tax-deferred accounts. In this situation, your first decision, as always, is your asset allocation decision—the percentage of your total savings that you invest in the various asset categories.



Retiree Stock Allocation Recommendations: Do You Fit the “Mold”?

How much of your portfolio should be invested in stocks if you are a retiree living off of your retirement savings?
The answer depends on how closely you fit the typical “mold.”
At first blush, there would appear to be a fair amount of disagreement among the “experts” on this seemingly basic question. But upon closer examination, it is clear that many of these disagreements stem from differing assumptions about the typical retiree.
In this article, we’ll take a look at the basic disagreements that exist among professionals. A better understanding of the assumptions that underlie their models—and how those assumptions affect the recommendations—can help you determine which “mold” comes closest to fitting your own situation.



Five Big Lessons From Market History

Investment mistakes, particularly those involving asset allocation, are painful indeed. Once made, however, they should be turned into important lessons.
Mistakes can and are made in all kinds of environments, and the market’s behavior over one 16-year period encompasses the extremes, stretching from two severe bear markets with a long bull market in between. This all-encompassing financial market history can provide a number of valuable asset allocation lessons.