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Picking an asset mix

The right asset mix for you should balance your retirement timeline and your comfort with risk.
5 minute read

Different asset mixes meet different needs

Choosing investments isn't a one-size-fits-all exercise. However, there are certain broad principles that apply to picking an asset mix.

Your asset mix should align with your situation: how much time you have until you'll need the money, and how much risk you can take and still sleep at night.

1. When do you need the money?

If you're not planning to retire for decades, you have plenty of time to ride out any temporary downturns in your account balance. So you can afford to take on more risk in the hopes of getting higher returns.

If you're getting close to retirement, however, you won't have as much time to wait for the market to bounce back if it hits a rough patch. In this case, you might be better off in an asset mix with lower risk.

But be careful not to be too conservative—your account needs to continue growing enough to last you through several decades of retirement!


2. How much risk are you comfortable with?

Some people can easily ignore the day-to-day changes in account balance that sometimes come with more aggressive investments. Instead, they focus on the overall progress toward their goal. Others lie awake at night fretting about what their investments will do tomorrow.

It won't do you any good to constantly worry about your investment decisions, and it probably won't be much fun either. So choose a level of risk you know you can live with.

Putting it together

Our experts analyze decades of data on market returns and investor behavior to find the asset mix that makes the most sense for you, based on your timeline and comfort with risk.

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All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.

Vanguard's advice services are provided by Vanguard Advisers, Inc. ("VAI"), a registered investment advisor, or by Vanguard National Trust Company ("VNTC"), a federally chartered, limited-purpose trust company.

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VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.