With the right investment choices and diligent contributions in a retirement portfolio, investors stand a good chance of achieving their financial goals — maybe even more. The wrong investment mix, however, can get investors close to nowhere.
There’s no one right answer when it comes to how to invest your retirement savings, but it’s important to approach these decisions carefully. There are asset allocation calculators available on personal finance sites, including SmartAsset and Bankrate, as well as financial institutions’ websites, such as Fidelity, that can help novice investors understand how they should strategize.
Within these classes are different types of investments, too. For example, under equities, investors can find large-cap equities, which are invested in some of the bigger corporations in the country ; small-cap, which invest in smaller companies; and international funds, where investments are in companies outside of the U.S.
Schwab broke down an example of asset allocations for different types of investment approaches. A conservative allocation may only have 15% invested in large-cap equities, 0% in small-cap equities, 5% in international equities, 50% in fixed income and 30% in cash. Comparatively, an aggressive allocation could be 50% in large-cap equities, 20% in small-cap funds, 25% in international stocks, 0% in fixed income and 5% in cash.
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Source: CNBC - 🏆 12. / 72 Read more »