How you divide your money across different types of investments: how much goes into stocks, how much into bonds, how much into real estate, etc. There’s no one-size-fits-all answer. It depends on how long you plan to invest and how much price turbulence you’re okay with.
Walk through the numbers
Say you invest $10,000 with 60% in stock funds, 30% in bond funds and 10% in real estate funds. That is $6,000, $3,000 and $1,000. If stocks have a great year and grow to 70% of your total, your allocation has drifted and you might rebalance back to 60%.
Your mix of investments shapes most of your results and most of your ups and downs. Picking the mix matters more than picking any single investment.
Related terms
For education only and not personalized investment advice. Examples are hypothetical illustrations, not a prediction or a promise of results. All investing involves risk, including the possible loss of principal.