Risk Management: Asset Allocation

Risk Management: Asset Allocation

Joe DiPaolo

Whether your retirement is years away or right around the corner, your investment portfolio should be designed with your financial goals in mind. It needs to be forward-thinking enough to handle the whims of the market but flexible enough to make changes on the fly.

One of the most important concepts for any investor to understand is asset allocation. Put simply, asset allocation describes the division of stocks, bonds, and cash that make up your investment portfolio. Although this concept is straightforward, it has one of the largest impacts on your financial future.

Each asset class has its own set of risks and rewards, depending on your time horizon and financial goals. You and your financial advisor may make adjustments to your portfolio over the years as your needs change.

  • Stocks, also called equities, allow you to own a share of a publicly traded company. By investing in stocks, you have the potential for a higher return on your investment. But if the company has a bad year, or if the economy takes an unexpected turn, you may also lose money.1
  • Bonds, overall, have been a steadier source of fixed income. However, bonds are subject to interest rates and inflation risks, and their rate of return tends to be lower.1
  • Mutual funds and ETFs (exchange-traded funds) are pools of multiple companies in which you can invest. While many mutual funds have a mix of stocks and bonds, some specialize in one or the other. Mutual funds offer less risk than investing directly in stocks, as diversifying your asset allocation tends to spread the risk.1
  • Cash and cash equivalents give you flexibility for any unexpected emergencies that may arise. If your hot water heater dies, having funds on hand to take care of it without resorting to a credit card is helpful. However, your cash-on-hand cannot earn you money the way other investments might.1

Finding A Balance

When it comes to managing your portfolio, asset allocation requires a more hands-on approach. “Setting it and forgetting it” may sound appealing, but changes in the market warrant a portfolio review to make sure your asset allocation still makes sense.

Working with our team at DiPaolo Financial Group is a great way to make sure that your asset allocation reflects your goals, and they can help make adjustments to any changes that life throws your way.1

Reach out today!

Schedule Your Complimentary Consultation


  1. https://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/articles/how-to-understand-future-focused-asset-allocation

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

By Joe DiPaolo
Share:

Live Your Dream Retirement!

Whether you’re trying to break old habits or improve your financial health (and wealth), the five simple ideas found in this infographic can help you get the ball rolling toward a brighter 2023.

There are no warranties implied.

DiPaolo Financial Group, Inc. (DFGI) is a registered investment adviser located in Lutz, FL. DFGI may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. DFGI’s web site is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of DFGI’s web site on the Internet should not be construed by any consumer and/or prospective client as DFGI’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Any subsequent, direct communication by DFGI with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of DFGI, please contact the state securities regulators for those states in which DFGI maintains a registration filing. A copy of DFGI’s current written disclosure statement discussing DFGI’s business operations, services, and fees is available at the SEC’s investment adviser public information website – www.adviserinfo.sec.gov or from DFGI upon written request. DFGI does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to DFGI’s web site or incorporated herein, and takes no responsibility therefor. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

This website and information are provided for guidance and information purposes only.  Investments involve risk and unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy.  This website and information are not intended to provide investment, tax, or legal advice.

Insurance products and services are offered and sold through DiPaolo Financial Group, Inc. and individually licensed and appointed insurance agents.

Live Your Dream Retirement!

Whether you’re trying to break old habits or improve your financial health (and wealth), the five simple ideas found in this infographic can help you get the ball rolling toward a brighter 2023.