Portfolio Construction 101
Step 1: Define Your Goals
Time horizon and risk tolerance determine your asset allocation. Long-term goals allow for more equity exposure.
Step 2: Choose Your Allocation
A classic starting point is 60% stocks and 40% bonds. Adjust based on age and risk appetite.
Step 3: Diversify Within Asset Classes
Within stocks, spread across sectors and geographies. Consider both domestic and international exposure.
Step 4: Rebalance Regularly
Review your portfolio quarterly or annually. Sell winners and buy underperformers to maintain target allocation.