How to Determine the Right Asset Mix for Your Portfolio: Withstanding Market Cycles

This is part 2 of the “Withstanding Market Cycles” series on portfolio diversification and asset allocation…some of your best safeguards in times of volatility. For part one of the series “The Benefits of Portfolio Diversification,” click here.

The markets had a volatile start to 2019, reminding us of the importance of a well-diversified portfolio. Determining the right asset mix is a crucial part of this process.

Determining the Right Asset Mix for Your Portfolio

The asset mix determines the level of risk in the portfolio, as well as the long-term return one can reasonably expect.

For example, If an individual has a long time horizon, is very tolerant of risk, and has a primary goal of aggressively growing these assets, then having a greater allocation toward a high-growth, high-risk asset class – like stocks – may make sense. But if an individual has a shorter time horizon, is relatively risk averse, and has a primary goal of asset preservation, then having a greater allocation toward a lower-growth, lower-risk asset class – like bonds – may make sense.

Combining multiple asset classes in one portfolio allows us to mitigate some of the losses associated with the capital markets.

Questions? Talk to a financial advisor.


The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Personal Capital Logo

Like what you're reading?

Get tips, tricks, and tools sent right to your inbox.