Choose an Asset Allocation
Choose a basic investment allocation aligned with your goals, time horizon, and risk tolerance.
What Choose an Asset Allocation gets you.
By the end of this upgrade you will have a written target asset allocation matched to your time horizon and risk tolerance.
- List of current investment account balances by holding type
- Your investing time horizon for each goal (retirement, house, etc.)
- An honest sense of how you'd react to a large short-term loss
- Access to each account to check current holdings
Run the upgrade.
- 01
Separate money by time horizon
Group your investable assets by when you'll need to spend them: under 3 years, 3-10 years, and 10+ years, since horizon drives risk capacity.
- 02
Assess risk tolerance honestly
Rate how you would react to a 30-40% portfolio decline; if you'd sell everything, your allocation should carry less volatility than your time horizon alone suggests.
- 03
Pick a broad category mix per goal
Assign a target split across broad categories (e.g., stocks vs. bonds vs. cash) for each time horizon bucket rather than picking individual securities.
Rough stock allocation guide = 100 minus expected years to needing the money minus risk-tolerance adjustment (illustrative only, verify against current guidance)
- 04
Check diversification within each category
Within the stock portion, confirm exposure spans company sizes and geographies (domestic and international) rather than concentrating in one sector or country.
- 05
Calculate your current actual allocation
Add up your existing holdings by category across all accounts and express each as a percentage of total invested assets.
- 06
Document the gap and target
Write down your target percentages next to your current percentages so future contributions and rebalancing have a clear reference.
- Written target allocation exists for each time-horizon bucket
- Current allocation has been calculated across all accounts
- Gap between current and target is identified
- Allocation reflects both time horizon and honestly assessed risk tolerance
Annually
- Revisit targets after major life or goal changes
- Re-check risk tolerance after experiencing a real market decline
- Adjust the bucket mix as time horizons shorten
This is general education, not personalized investment advice — allocation choices depend on your full financial picture and risk capacity.