Introduction

An Introduction to Asset Allocation

Development of a personalized Asset Allocation Plan seeks to provide a disciplined and systematic approach to investing. It guides you from defining your personal investment objectives to determining a suitable portfolio. With all of the investment choices available, this plan helps you evaluate the many choices and create a well-designed plan specific to your needs.

The purpose of an Asset Allocation Plan is to determine how your investment assets will be divided among the available investment alternatives. Your plan will usually depend on you r financial objectives, time horizon, risk tolerance, and present financial situation.

Your Asset Allocation Plan may determine over 90% of the performance of your investment portfolio we believe. How you allocate your investment dollars far outweighs the potential effects of security selection and market timing. It is based on the Nobel-prize winning concepts of Modern Portfolio Theory - that through intelligent diversification you can help protect against many investment risks. Gains in one investment may help offset losses in another.

It is important to keep in mind that the focus of this Asset Allocation Plan is based on your long-term objectives. These are usually plans that have been made for five years or more. It means taking a reasonable amount of investment risk in the expectation of potential higher returns. And, since time has a moderating effect on investment risk, the longer your investment time horizon, the more likely you may earn a positive return.

Following your Asset Allocation Plan can be a critical element in reaching your financial objectives. It should be carefully determined. And, it should be reviewed and rebalanced periodically.

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Investment advice offered through Global Financial Planning Group, LLC; a registered investment advisor and separate entity from LPL Financial.