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Portfolios 101: Steps to a Suitable Portfolio

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1.
A 40-year-old should put how much money in stocks?
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The amount is a matter of personal preference, based on the investors goal for the money. The rule of thumb would suggest that 40-year-olds put 40% of their assets in cash/bonds and the remaining 60% in stocks. But those percentages may be inappropriate, depending on an individual investors goal. Asset allocation is a matter of personal preference.
2.
A successful portfolio _______.
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Should contain investments that work together to help you reach your goals. A portfolio can be made up of "good" investments, but they may not work well together.
3.
When its time to rebalance your portfolio, which is the most likely to happen?
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Youll probably have to increase your cash/bond position and decrease your stock position. Most of the time, stocks outperform cash and bonds. As a result, youll usually have to cut back your stock position when you rebalance.
4.
To determine whether your existing portfolio fits your investing blueprint, you should, among other things, identify your core investments.
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True. Your core investments will be the ones that are central to your portfolio.
5.
When rebalancing your portfolio, it is a good idea to weed out redundant investments.
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True. When you have redundant investments, one of them usually has lower expenses and a stronger long-term risk/reward profile, which can make it an advantage.