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My Portfolio

Creating an investment portfolio doesn’t have to be complicated or timeconsuming. Just follow our simple, five-step process along with the guidance of a financial advisor who can apply these general strategies to your situation. Step 1: Set specific goals. Step 2: Allocate your assets. Step 3: Diversify across investment styles. Step 4: Select your investments. Step 5: Follow your plan over the long term.

Step 1: Set specific goals
Before creating a portfolio, think about why you're investing in the first place. The more specific each goal is, the better you can decide which investments may be right for you. Start by answering these questions:

How much money will you need? Remember to account for inflation when planning future expenses. How much time do you have? When will you need the money? How long will it need to last? As a rule, goals with longer timeframes require more aggressive investments. How much risk can you tolerate? All investments involve risk. The key is to assume enough risk to grow your portfolio, but not so much that you can't tolerate the market fluctuations.

if you have the time and temperament to ride out market fluctuations. investment grade to high yield. Your exact allocations depend on your unique needs. As a result.S. known as "investment styles. a broadly diversified portfolio is likely to fluctuate less than anyone style alone. Bond styles range from government to corporate to municipal. Stocks to grow your principal and beat inflation over time 2. others may be falling. short-term to long-term. Cash to meet short-term needs and provide portfolio stability Asset allocation seeks to avoid the risk of owning just one type of investment. U. market sectors and countries.Step 2: Allocate your assets Asset allocation is simply the process of deciding how much money to put into each of the three main investment categories: 1. to international. your stock allocations can include growth and value companies of different sizes. you have the potential to offset any losses from one holding with gains from others. For example. When some are rising. the next step is to diversify across their various sub-categories. Because different investments don't always move in the same direction. As you grow older or more conservative. Bonds to generate income and offset stock market risks 3. Each of these investment styles tends to react differently to market and economic conditions. a stock-heavy portfolio may make sense. you may want to gradually increase bond and cash positions. Step 3: Diversify across investment styles After allocating assets into each investment category. ." For example.

buy and manage on your own. Strategy/Investment process  Uses an asset allocation strategy designed for investors expecting to retire around the year 2010. with the allocation changing on an annual basis. Mutual funds are managed by professionals and diversified across more securities than you can likely afford to research. Provide asset allocation from a single fund by pursuing a “fund-of-funds” strategy. Asset Allocation (Examples) 1. Smart Retirement Funds. many people find it easier to simply invest in mutual funds.    Are a series of target-date funds that are designed to provide an investor with a convenient way to reach their retirement goals.  . Invests in a combination of equity. becoming more conservative as the Fund nears the target retirement date. Use an asset allocation strategy that becomes more conservative as the Fund nears its target retirement date. It isn't unusual for a single fund to include hundreds of different holdings so that no one security has too much influence on your total returns. Objective The Fund seeks total return with a shift to current income and some capital appreciation over time as the Fund approaches and passes the target retirement date.Step 4: Select your investments Instead of building a portfolio with individual stocks. fixed income and short-term mutual funds. bonds and cash securities.

53% .04% 9. Provide asset allocation from a single fund by pursuing a “fund-of-funds” strategy.19% 2011 0.22% 2.23% 21.14% 0.90% 6. Invests in a combination of equity. Objective The Fund seeks current income and some capital appreciation.87% 11.82% 2.08% 11. Use an asset allocation strategy that becomes more conservative as the Fund nears its target retirement date.90% 10.20% 21.46% -12.11% 11. Smart Retirement Funds Income Fund    Are a series of target-date funds that are designed to provide an investor with a convenient way to reach their retirement goals.Performance & Rating Year at NAV S&P Target Date 2010 Index Lipper Mixed-Asset Target 2010 Funds Index 2007 4. fixed income and short-term mutual funds.24% 5.20% 20.66% -16.65% 9.  Performance & Rating Year at NAV S&P Target Date Retirement Income Index Lipper Mixed-Asset Target Allocation Conservative Funds Index 2007 2008 2009 2010 2011 4.84% 22.77% 14.99% 2.87% 1.79% -17.49% 23.58% 14.36% 4.58% 11.82% 6.20% 2008 2009 2010 21.67% 6. Strategy/Investment process  Uses an asset allocation strategy designed for investors who are retired or expect to retire soon.

In most cases. Together. you can decide if your current investments are still appropriate or if any adjustments are needed. .Step 5: Follow your plan over the long term Many people make the mistake of switching investments or completely abandoning their portfolio during normal market swings. Consider meeting with a financial advisor at least once a year to review your portfolio. then neither should your fund mix. a better approach is to simply buy and hold the same sound investments over time. If your personal circumstances or the financial markets don't change dramatically.