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Portfolios 101: Steps to a Suitable Portfolio

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1.
To determine whether your existing portfolio fits your investing blueprint, you should, among other things, search for overlap among your investments.
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True. Searching for overlap will weed out unneeded redundancy.
2.
When figuring out whether your current portfolio matches your pattern, which question should you NOT ask?
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How did my individual investments do last week? When examining your current portfolio, dont worry about the short-term performance of individual investments. Instead, focus on how these investments are--or arent--working together. Ask which investments are your core investments, and whether you have a lot of overlap among your investments.
3.
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.
4.
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.
5.
What vital information does your goal give you?
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Both of the above. Your goal tells you both how long youll be investing and how much money you can put at risk.