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Investing Specialists

The Error-Proof Portfolio: Should Your Asset Allocation Look Like Everyone Else's?

Customize your glide path based on other income-producing assets, job stability, and other factors.

For investors bewildered about how to split their portfolios among stocks, bonds, and cash, off-the-shelf sources of asset-allocation guidance can be a reasonable starting point. Even if you'd like more control over your holdings than a target-date fund affords, for example, you can still eyeball the asset allocations for target-date funds geared toward your retirement date. ( Morningstar's Target Date Fund Series Reports enable you to see a particular lineup's glide path--the changes in its asset allocation over time--at a glance.) Even among different target-date series, you're likely to glean some useful takeaways. Not only do equity allocations invariably step down as the investor gets closer to the target date, but so do allocations to riskier investment types such as junk bonds and emerging-markets stocks.