Asset Allocation Strategy

Now that you know your investor style and tolerance for risk, you can translate that into an asset allocation strategy.

Asset allocation is a strategy for investment selection. Simply put, it's the process of diversifying your investment dollars across different asset categories, such as stock funds, bond funds, and cash alternatives (which include interest bearing accounts).  

Spreading your investments among different asset categories may help weather the ups and downs of the market because you don't depend on any one type of investment to carry the load for your investment mix. As a general rule, when investments in one asset class under-perform, investments in other classes may perform better.

Though this is generally perceived to be a smart approach, asset allocation and diversification do not guarantee profits or ensure against a loss in a declining market.
 

MSRS provides sample asset allocation strategies based on different investor types.

Now that you know more about an asset allocation strategy and the different investor types, you can
choose your investments from the investment options available in the MNDCP.

 

 

 

FOR ILLUSTRATIVE PURPOSES ONLY Intended to illustrate possible investment portfolio allocations
that represent an investment strategy based on risk and return. This is not intended as financial planning
or investment advice.

In applying a particular asset allocation model to your individual situation, you should consider other
assets, income and investments in addition to the account you are considering for investment to the
extent the model does not consider these additional assets. Investing involves risk, including possible
loss of principal.