Five Fundamentals of Asset Allocation
Keep these factors in mind when diversifying your investment portfolio

1. Spreading assets across a variety of different investments like stocks, bonds, cash and real estate is one of the most important principles of investing. Various asset classes often react differently to economic and marketplace changes, so gains in one class can offset losses in another. Over time, this can reduce a portfolio’s volatility.
   
   
2. Managing risk is a second key objective of asset allocation and diversification. To determine an asset mix with an appropriate blend of risk and reward potential, consider your financial goals, your investment horizon, and your individual preferences.
   
   
3. Take into account your risk tolerance – how comfortable you are with short-term changes in your portfolio value. Those who prefer less risk and less fluctuation might select a more balanced or moderate portfolio, with less emphasis on stocks, and more emphasis on bonds and other stability-oriented investments.
   
   
4. Uneven price movements in investments can alter the asset mix of your portfolio over time and cause your allocation to be out of balance. Rebalancing your investments at least once a year can help keep your portfolio aligned with your risk and reward objectives.
   
   
5. Recognize that many external factors may affect your portfolio’s performance. Such factors that are out of your control include market conditions, financial news, world events, and inflation. Rather than concentrating on variables such as these, pursue your financial goals by focusing instead on things you can control, such as investing early, investing on a regular basis, adhering to a long-term investment horizon, and formulating a sound asset allocation strategy.

Investments and investment advisory services offered through CUSO Financial Services, L.P. (CFS) an independent broker-dealer and SEC Registered Investment Advisor are Not NCUA/NCUSIF insured, are not credit union guaranteed and May lose value. Space Coast Credit Union is in partnership with CFS. Financial Advisors are employees of Space Coast Credit Union and registered through CFS. Member FINRA/SIPC).

The information on this page is for educational purposes only. SCCU is not engaged in providing estate planning or other advice. Please consult with a competent estate planning professional regarding any specific estate planning questions.