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The following pages are aids designed to assist in the development of a diversified portfolio.  The following categories are presented only as an example and opinions expressed are present opinions only.  A free prospectus on funds in each category can be provided detailing the fund’s investment policies, risks, sales charges and expenses.  Please read the prospectus carefully before investing or sending money.  Investments in mutual funds involve risks, including possible loss of principal.  The investment return and principal value of an investment in funds will fluctuate and therefore an investor’s shares, when redeemed, may be worth more or less than their original cost. 

The first step is to define the primary categories.   I use the following three:

1. Asset Allocation: 

   Most mutual funds that fall into this category are actively managed by an investment professional.  The investment professional will periodically reallocate the portfolio between fixed income (bonds) funds and equity (stocks) funds based on the investors risk tolerance and investment objectives.  This strategy reduces your concern on timing the market.  The decision on when to buy or sell and what to buy or sell is in the hands of the professional money manager.    

2. Fixed Income:

   Fixed income mutual funds invest in bonds.  Investors who desire greater income and  more safety should consider weighting their portfolio more heavily in fixed income funds versus equity funds.  As investors get older with fewer income earning years ahead their investment objectives tend to shift from being aggressive to more conservative.  This can be reflective in a portfolio that shifts from capital appreciation to preservation of capital.  Fixed income mutual funds can be very conservative while others aggressive.  Fixed income investments are considered to be interest rate sensitive meaning as interest  rates rise, principal value may fall.  Keep in mind, when investing in fixed income funds, the fund itself is not guaranteed, secured, or insured even though the securities they invest in may be.  Always read the prospectus carefully before investing.

3. Equities:

   Equity mutual funds are stock funds.  Investors who desire capital appreciation versus income and are comfortable with the volatility adherent to these investments should  consider weighting their portfolio more heavily in equity funds versus fixed income  funds.  While fixed income funds tend to be interest rate sensitive, performance in equity funds tend to be reflect stock market activity.  Always read the prospectus and consult an account representative before purchasing any mutual fund.                                             

The second step is to determine your allocation.  What percentage of your total assets will be invested in each of the three categories: Asset allocation, Fixed income, and/or Equities.

100% = $ __________

Total Portfolio Assets

The third step is to determine your allocation within each category. 

Click here if you have allocated a portion of your portfolio in the asset allocation category.

Click here if you have allocated a portion of your portfolio in the fixed income category.

Click here if you have allocated a portion of your portfolio in the equities category.

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