What is the best asset allocation advice you ever received?

It may sound like the usual old cliche, but the best asset allocation advice that one can receive is to diversify. However, diversification is also dependent upon where you are in your life, your career and your retirement plans.

If you are in your mid-thirties and have a stable career, your diversification path can include a larger risk taking percentage. You have a better chance of making positive earnings and a lot of time left in your income making direction to change your directions.

If you are in your mid-forties and have a stable career, the risk factor should be lowered. And I mean lowered quite bit. A high risk factor at this point in your life is like playing the lottery. Not a good idea.

Both of the above scenarios are based on one thing: a stable career situation. In today’s economy, there are many that thought they had stable careers until the day they got their lay off notice. The entire world has been turned upside down. It isn’t uncommon to see someone in an expensive suit applying at a fast food restaurant for a job.

Knowing what your particular balance in low and high risk investments can be more than challenging. It is often the best advice to actually seek an investment counselor. You will benefit from their knowledge and expertise. While you might think about doing it yourself, it will take you months to learn what they already know.

Diversification can make or break a portfolio. The best asset allocation advice that I received was to keep my eyes on the green companies. Anything that the people want, even in a bad economy, will produce companies that supply it to them. And people want to improve their green footprint. Everyone is jumping on the band wagon on this topic and locating the smaller start ups that have a good (albeit shorter) business plan and growth process shows excellent promise.

Careful study of long term, well established success patterns in a company will help you invest in the low risk side. The price may be higher, but those that have weathered all kinds of economies demonstrate a savvy knowledge of their own.

There are a number of investment options that you can take advantage of, no matter what the state of the economy. Be careful to watch for high spike increases in any area. This can be a warning sign. What goes up must ultimately come down. The dot com and real estate bubbles are two examples and I am sure they won’t be the last.

Another piece of important asset allocation advice is to always examine the strategies. What was perfect for you five years ago may not be right for you now. You should review your strategies and investments with an investment counselor about every six months or so. More often if there are downward economic trends. You may be required to change up on the direction that you are going to weather a storm or take advantage of an upswing trend.

The information supplied in this article is not to be considered as medical advice and is for educational purposes only.