- Large-Cap Stock Funds 16%
- Small-Cap Stock Funds 5%
- Foreign Stock Funds 10%
- Bond Funds 45%
- Cash 24%
Asset Allocation
Studies have shown that more than 90% of a portfolio's return depends upon how the portfolio is divided among different asset classes_ stocks, bonds and cash equivalents. In the olden days ( five years ago) many investors automatically shifted towards fixed income as they approached retirement. Today, recognizing that people could live 25 or more years in retirement, and that inflation could endanger the portfolio, a new thinking has emerged. Here is a portfolio strategy suggested by Smart Money Magazine for Seniors.
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