Are You Being Aggressive Enough?

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Are You Being Aggressive Enough?

How aggressive you should be with your investments depends on three things:

• Your investment goal—how much money you’ll need
• Your investment horizon—how long you plan to invest for the goal
• Your ability to handle volatility

To find out whether your current portfolio is aggressive enough to meet your goals, use an online asset allocation tool.

If you find that your current portfolio is unlikely to allow you to reach your goal, or you find that it isn’t as volatile as you may have thought, consider ways to make your portfolio more aggressive.

Shake up your asset mix

You can do plenty of things in an attempt to alter your long-term returns and volatility. One significant move: reducing your bond and cash investments and increasing your position in stocks.

Many financial professionals argue that your blend of cash, stocks, and bonds contributes more to your portfolio’s return and volatility than what investment styles you practice, what sectors you have exposure to, and what individual securities you choose.

While we believe all of these factors play important roles in your volatility and return, we agree: Asset allocation is huge. And the more of your portfolio you have in stocks and the less you have in bonds and cash, the more intense your portfolio’s performance can be.