Once you've defined your investment goals and thought about how much risk you can take, the next step is to determine your portfolio's asset allocation. When we talk about “asset allocation,” we are referring to the way your portfolio is diversified across asset classes, such as stocks, bonds, and cash.
Before choosing individual stocks or funds, you need to think in broader strokes – you need to consider your asset allocation. Finding the best asset mix for you is crucial if you want to meet your goals. In fact, Morningstar believes that setting up the right asset mix to support your investment strategy is just as or more important than choosing great investments.
The articles in this section discuss what you need to know before determining your asset mix and how to use the tools available in your Scottrade account to establish your mix. The last article also discusses some of the limitations of online asset-allocation tools that you should be aware of when you're building your portfolio.
Read Next: What You Need to Get Started
While you're reading these articles, keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market. Investors should consider the investment objectives, charges, expense, and unique risk profile of an Exchange Traded Fund (ETF) or mutual fund carefully before investing. A prospectus contains this and other information and should be read carefully before investing. A mutual fund prospectus is available through www.scottrade.com or through a Scottrade branch office. An ETF prospectus must be obtained from the issuer.
