How your investments are structured in your portfolio is at least as important as what goes into your portfolio. The wrong balance can leave you overexposed to risk.
Have a look at the traditional "diversified" portfolio of 60% stocks and 40% bonds. This is still a wildly popular investment strategy.
It's also one of the worst mistakes an investor can make; those who use this approach stand to lose everything when the "stuff" hits the fan.
You can actually see the severe imbalance in this chart at right.
We believe that "50/40/10" is the best way to structure your portfolio. It's a risk-balanced approach that leaves you exposed to the biggest possible gains from foundational, bedrock stocks and equities, growth and income shares, and a portion of speculative investments that offer the potential for runaway gains.
Just have a look at this chart…
This portfolio structure offers superior returns and the risk balance you need to weather even the strongest market volatility with confidence.
Once you have your portfolio structured, it's important to determine how much capital you want to commit to your portfolio and how big a position you want to take.
Now, Money Map Press publications and trading services, like the Money Map Report and Radical Technology Profits, almost always recommend optimal position sizes when they send out "Buy" alerts.
But we've created this Position Size Calculator to help you make an informed decision about how much to invest overall, and in specific investments, too.
It's a really powerful tool. You can enter the name of your favorite stock or Money Morning recommendation (we'll even get you an up-to-the-minute quote), your total investible assets, how much you'd feel comfortable risking, and your desired trailing stop…
Then just hit "Calculate" and you'll get everything you need to know. You can try the Calculator yourself right here.
Good investing!
Make the Most of Your Membership: Discover everything Money Morning offers you, from actionable recommendations to powerful investment tools to loyalty rewards and great deals from our partners. Our membership page shows you every resource available to you.
Folks: how the heck did you calculate or determine the 90% risk to stocks in your 'traditional diversification" chart (the 60/40 conventional asset allocation)? Not following, and not intuitively apparent. Please share your logic. thx much SMS