Asset Allocation
Asset allocation is how you divide your portfolio among stocks, bonds, and cash. It's the single biggest driver of your long-term risk and return — far more than picking individual investments — because each asset class behaves differently in good and bad markets.
Allocation decides most of how a portfolio behaves — far more than which particular funds are chosen inside each slice, which is where most attention goes. The conventional shape holds more in shares while the horizon is long enough to recover from a fall, shifting toward bonds as the money is needed; a target-date fund does this automatically and is a reasonable default for anyone who would rather not manage it. Two constraints set the right mix, and both matter. The return you need, which follows from your savings rate and horizon. And the volatility you can hold through without selling, which is the binding one — an allocation abandoned in a crash performs worse than a more cautious one kept.
Put it to work
Investment Calculator
Project an investment portfolio's growth with monthly contributions — final value, your money vs market growth, and the year-by-year path.
Retirement Calculator
Project your retirement savings: what your balance could reach by retirement age and the monthly income it could sustainably provide.