How To Diversify You Stocks And Bonds

How should I diversify my stocks and bonds?

A portfolio should have exposure to a lot of different asset classes. So you take, for example, US stocks. And you can even divide them between growth stocks, those that have really dramatic earnings growth, and value stocks, which are maybe not growing as much, but you are more stable and have great brands and assets behind them. And so, you can also have international stocks. You should maybe even have a quantity of emerging market stocks. Those are from sort of the riskiest countries. You also need bonds and depending on your age, probably less bonds than stocks. And the trick is to do, for diversification standpoints, to put them in mutual funds where you are buying pools of stocks and bonds that are managed professionally for you. So you're not out there picking the latest hot stock and getting burned.